PAI acquires LDC's Addo Food and Equistone's Winterbotham Darby

Katharine Hidalgo
10 November 2020

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PAI Partners has agreed to acquire Addo Food Group from LDC and Winterbotham Darby from Equistone Partners Europe.

LDC was also a minority shareholder in Wintherbotham Darby and the deal represents a full exit for all investors in both companies.

PAI is currently investing from its seventh-generation fund, which closed on €5bn in March 2018. The fund was 40% deployed as of December 2019, according to Unquote Data. It makes equity investments of €150-400m, and it is expected that equity will account for 30-50% of the initial capital structure for each deal.

PAI plans to bring the two businesses together under one platform. Both management teams are expected to benefit from the sharing of best-practices, new product development and supply chain initiatives, according to a statement.

Interested parties were contacted for the sale of Winterbotham Darby in early October in a sale process run by Houlihan Lokey, according to Unquote sister publication Mergermarket. Spayne Lindsay & Co was hired as the sell-side adviser for Addo Food in September 2020. Both companies have benefited from increased supermarket spending due to the coronavirus crisis, according to the reports.

The management teams, led by CEO Deborah Bolton at Addo and CEO Steven Higginson at Winterbotham Darby, will remain in place, with the operations of the two businesses continuing to be run separately. Paul Monk, who is currently the executive chairman of both businesses, will stay on as executive chairman of the newly created platform.

Previous funding
Direct secondaries 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.

LDC acquired the company from Vision in 2017, alongside Fulbrook Thorpe Investments. Guggenheim provided a new debt facility to support the deal, while Addo's existing working capital facilities provided by PNC were rolled forward.

In February 2011, LDC acquired a majority stake in Compleat Food Network, as Winterbotham Darby was then known.

Equistone invested in Winterbotham Darby in December 2012. The firm drew equity from its fourth-generation fund, which closed on €1.5bn in January 2013. Equistone supported the bolt-on acquisitions of Alatoni and Vadasz during its investment period.

Company
Nottingham-based Addo is a chilled savoury pastry producer, including sausage rolls, scotch eggs and pies. The company was founded in around 1820 and generates £300m in revenues and £20-30m in EBITDA, according to a report by Mergermarket.

Founded in 1962, Winterbotham Darby is a chilled food business focused on continental foods like olives, antipasti and charcuterie. It has also become a supplier of vegan meat alternatives and other plant-based products. For the year ending on 31 March 2019, it generated revenues of £187m. It is based in Redhill.

People
PAI Partners – Colm O'Sullivan (partner).
Equistone Partners Europe – Paul Harper (partner).
Winterbotham Darby – Steven Higginson (CEO).

Advisers
Equity – Stamford Partners (M&A); A&O (legal).
Vendor – Spayne Lindsay & Co (corporate finance); Browne Jacobson (legal); KPMG (financial due diligence); LEK Consulting (commercial due diligence); Travers Smith (legal); Houlihan Lokey (corporate finance).