Bridges Ventures buys Wholebake

Finance Wales achieved a 5.5x return following the deal, which it stated was its most profitable exit to date.

Bridges invested via its Sustainable Growth Fund III, which closed on £125m in December 2013, beating its target of £100m. According to the venture capital firm, it aims to invest 80% of the fund in companies in the most deprived parts of the UK. It typically injects £2-15m into later-stage businesses generating revenues of £5-50m.

So far this year, the fund has invested in Orla Healthcare, a London-based service delivering acute medical care at home, and Clothingsites, an online designer menswear retail group.

Bridges identified Wholebake for investment as it will create at least 60 jobs during the next three to five years in an area of high unemployment in north Wales. Bridges also stated the company has the potential to deliver strong growth in the healthier snacking sector.

Previous funding
Finance Wales backed the management buyout of the business in May 2011, injecting £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.

During Finance Wales' period of investment, Wholebake doubled its profits and tripled its workforce in Corwen to facilitate the expansion of the company's own-brand and contract-manufacturing operations.

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.

The Welsh government's Economic Growth Fund provided a £250,000 capital injection in September 2012 as part of a £1m expansion of the office facilities and staff welfare provision.

Company
Wholebake is a manufacturer and distributor of gluten-free snack bars, composed 60-70% of seeds and with a high level of slow release energy and natural protein. It distributes its products, including main brand 9bar, to supermarkets, health food chains and other retail outlets.

Founded in 1996, 104 people currently work at its sites in Corwen and Wrexham. CEO Mark Gould and operations director Richard Shaw acquired the business in 2011, growing revenues from £4m to more than £11m for the year to 31 March 2014.

People
Bridges Sustainable Growth Funds partner Oliver Wyncoll led the deal for Bridges, supported by associate Khidhr Shafiq.

Advisers
Equity – Addleshaw Goddard, Mike Hinchcliffe, Marc Field (Legal); BDO, Chris Grove, Derek Neil (Financial due diligence); Brand Potential, Mary Say (Commercial due diligence).
Company – TLT, Jon Close (Legal); Hollis Gore, Patrick Gore (Financial due diligence).

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• Topics
• UK / Ireland
• Consumer
• Buyouts
• United Kingdom
• Bridges Ventures
• Finance Wales