Sep 14, 2021

Risk Capital Partners sells GAIL’s Bakery to Bain Capital Credit and its industry partners for over £200 million

Risk Capital Partners, the private equity firm, announces the sale of the leading artisan bakery business Bread Holdings Ltd, which owns GAIL’s Bakery and The Bread Factory, to Bain Capital Credit in partnership with EBITDA Investments, the food ecosystem fund, backed by entrepreneurs Henry McGovern and Steven K. Winegar. Luke Johnson, chairman of Risk Capital Partners, will retain a shareholding and remain on the board.

Since Risk Capital Partners first backed the management team under co-founder and CEO Tom Molnar in 2011, the company has expanded from seven retail bakeries to seventy three today. Meanwhile, the wholesale business provides world-class baked goods to premium customers and supermarkets from its central bakery in Hendon, UK.

Overall, the investment in Bread Holdings delivered a double digit cash multiple to Risk Capital Partners on their original stake. During the last decade, the business has grown organically and through acquisition – revenues have risen six-fold under Tom Molnar’s leadership over this time.

Bread Holdings has adapted and thrived this year, despite the challenges of the pandemic, opening a record number of new GAIL’s branches in and around London and the South East of England.

Luke Johnson said: “We are immensely proud of the achievements of GAIL’s and the Bread Factory since we first became involved, and grateful to Tom and his team for their outstanding efforts in expanding the business. I’m excited to remain a part of the business going forward and believe the new owners will help add considerable value in the years to come with their mission to make chef-quality craft baking more widely available.”

Sandro Patti, a Director at Bain Capital Credit, commented: “GAIL’s is a premier brand in the growing craft bakery market. Its ability to supply high quality, fresh bakery products meals and drinks with a customer-focused culture drives GAIL’s strong brand following, like-for-like growth and expanding bakery network. We are thrilled to partner with experienced industry pioneers Luke Johnson, Henry McGovern, Steven K. Winegar and Tom Molnar to support the GAIL’s Bakery and Bread Factory teams in achieving their goal of broadening access to high quality baked goods via new neighborhood GAIL’s. GAIL’s represents our third investment in food services in the past 18 months and is an important acquisition in our growing portfolio of mid-market businesses in Europe.”

Henry McGovern, a founding partner at EBITDA Investments, shared: “We know a winner when we see one and GAIL’s is such a business. I have followed it for years. Throughout the Covid-19 pandemic its team continued to operate at the highest standards and to serve the public without failing. We are very pleased to be co-investing with Mr. Luke Johnson, who has been an investor in the company for over a decade, the management team led by its CEO – Tom Molnar, and a leader in the world of private investments, Bain Capital Credit. With our combined knowledge and spirit of ‘anything is possible’, we look forward to growing this great brand.”

Nomura and CMS acted as advisers to Bread Holdings on the transaction.