LDC backs SBO of Addo from Vision Capital

The exit brings to an end a 10-year holding period for the vendor, which acquired the business from Northern Foods in December 2006.

Under Vision's tenure, the company's headcount has fallen from 6,000 to 2,500, though it bolted on the chilled savoury pastry division of Kerry Foods in August 2014. It also rebranded from Pork Farms Group in 2015.

Financial details of the transaction remain undisclosed, though Addo generated £15.7m in EBITDA before exceptional items in 2015, according to publicly available documents.

According to a statement issued by LDC, the company will continue to pursue potential acquisitions in order to expand into closely related market segments. It will also look to invest in new product development.

LDC head of new business Andy Grove and investment director Victoria Marcer will take a seat on the Addo board as part of the deal. The business has also appointed Paul Monk – the non-executive chairperson of LDC portfolio company Seabrook Crisps who has previously worked at Mars, Golden Wonder and Quorn – as non-executive chairperson.

The deal is the eighth investment made by LDC in 2017. Earlier in April, the GP backed the management buyout of Manchester-based biscuit producer Hill Biscuits.

Vision was invested in Addo via its £160m Vision Capital Partners VI vehicle, according to unquote" data.

Debt
Guggenheim provided a new debt facility to support the deal, while Addo's existing working capital facilities provided by PNC were rolled forward.

Previous investment
Direct secondary firm Vision acquired Addo in December 2006 through its purchase of a portfolio of four businesses in the speciality bread, chilled pastry, cake and flour milling sectors from Northern Foods for £160m, according to unquote" data.

Company
Founded in 1922 as part of Northern Foods and headquartered in Nottingham, Addo is a producer of savoury pastries including sausage rolls, hot pies, slices, pork pies, scotch eggs and quiches. It comprises six divisions, including Dorset Foods, Riverside Bakery, Palethorpes Bakery, Poole Bakery, Tottle Bakery and Spalding Bakery.

Addo has a headcount of 2,500 across six UK sites in Nottingham, Market Drayton, Spalding, Poole and Shaftesbury. In the year ending March 2016, it generated a turnover of £236.4m, according to publicly available documents.

People
LDC – Andy Grove (head of new business); John Green (head of East Midlands); Victoria Marcer (investment director).
Vision Capital – Oliver Jones (associate).
Addo Food Group – Chris Peters (managing director).

Advisers
Equity – Catalyst Corporate Finance (corporate finance); Eversheds (legal); Deloitte (tax); Food Strategy Associates (commercial due diligence); Lauras (operational due diligence).
Vendor – Houlihan Lokey (corporate finance); KPMG (financial due diligence); Macfarlanes (legal).
Management – Browne Jacobson (legal).

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• Topics
• Buyouts
• Exits
• UK / Ireland
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• LDC
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• Vision Capital