Bridges reaps 2.5x return on sale of Wholebake to Elysian

Greg Gille
04 August 2021

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Elysian Capital has acquired UK-based healthy snacks producer Wholebake from Bridges Fund Management.

Wholebake's management will also reinvest in the business. Working capital facilities were provided by Barclays Bank.

In late 2019, Mergermarket reported that Wholebake had hired KPMG to explore a sale, citing two sources familiar with the matter. The process was expected to kick off in 2020.

Elysian is investing via Elysian Capital III, which closed on its GBP 325m hard-cap in 2020. Elysian III looks to invest GBP 20m-40m in UK lower-mid-market companies with enterprise values of up to GBP 100m.

Wholebake is the second investment from the fund in quick succession, following from the acquisition of Eton Bridge Partners, a UK-based consulting firm specialising in practices covering corporate leadership.

For Bridges, the partial exit closely follows on the sale of World of Books to Livingbridge in early July. Bridges will remain invested in the company as a minority shareholder.

Bridges will reap a 2.5x return on its investment following the sale of Wholebake, in which it will also remain a minority shareholder. The firm acquired a controlling stake in the business, providing a full exit for previous backer Finance Wales, in 2014. Bridges invested via its Sustainable Growth Fund III, which closed on GBP 125m in December 2013.

At the time, Bridges said it identified Wholebake for investment as it would create at least 60 jobs during the following three to five years in an area of high unemployment in north Wales.

The investment went on to deliver in that regard, with headcount growing from 112 at the time of the investment to 230 currently. Under Bridges' ownership, revenues also tripled, the firm said in a statement.

Previous funding
Finance Wales backed the management buyout of the business in May 2011, injecting GBP 750,000 in debt and equity. A majority shareholding was acquired from the company's founder, with the management team investing a "significant" amount, according to Unquote Data. In addition to the debt provided by Finance Wales, a leverage package was provided by an undisclosed institution for working capital. The GP first supported the firm in 2001 when its Xenos Business Angel Network provided Wholebake with an expansion investment. The fresh capital was earmarked for efficiency improvements and the implementation of new products.

Company
Founded in 1984, Wholebake is a manufacturer and distributor of gluten-free snacking products. Based in Chester and with two production facilities in north Wales, Wholebake's current portfolio includes a variety of product types including weight management, sports nutrition, toddler snacking, healthy indulgence, vegan-friendly and digestive health products.

According to publicly available accounts, Wholebake posted revenues of GBP 28.6m with operating profit of GBP 8.1m in the year to March 2020.

People
Elysian Capital - Ken Terry (partner).
Bridges Fund Management - Oliver Wyncoll (senior adviser).

Advisers
Equity - Stephenson Harwood (legal); Aon (insurance due diligence); ERM (environmental due diligence); EY (financial due diligence); BDO (tax); Spayne Lindsay (corporate finance); Food Strategy Associates (commercial due diligence).
Vendors - Grant Thornton (corporate finance, tax); EY (financial due diligence); Addleshaw Goddard (legal).