NBGI buys cake business for £23.5m

Greg Gille
05 December 2012

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NBGI Private Equity has backed the ТЃ23.5m management buy-in of McCambridge Group Holdings's cake division.

Bank debt for the transaction was provided by PNC Business Credit and Beechbrook. NBGI invested via the second tranche of its NBGI Private Equity Fund II vehicle, which closed on €147m in 2007. The business will be rebranded following the acquisition.

NBGI stated that the buyout was consistent with the strategy underpinning its five previous MBIs in the UK food sector: targeting cash-generative, cash-heavy businesses with competitive purchase multiples.

The GP brought in Andrew Johnson as new CEO of the spinoff. NBGI chose to partner with Johnson based on his track record of private equity-backed MBIs as well as its experience in the cake manufacturing sector. He was notably involved as chief executive in the MBI of private equity-backed Elisabeth the Chef in 2004.

NBGI investor director Richard Babington directly sourced and led the transaction. NBGI was the only private equity house involved in the process, other potential suitors for the division being trade players.

Company
McCambridge's cake division operates from four primary manufacturing locations in the UK and a further facility in Poland. NBGI looks to grow the business into a platform for consolidating the private label and branded cakes sector in the UK.

The GP didn't wish to comment on the company's financials.

People
Richard Babington led the deal for NBGI, assisted by Rupert Brown. He will join the company's board, alongside incoming CEO Andrew Johnson.

Advisers
Equity – Geldards, David Tilly, Hugh Strickland, Debra Martin, Peter Francis (Legal); PricewaterhouseCoopers, Geoff Eversfield, Phil Vellacott (Financial due diligence); RPL, Geoff Rampton, Roger Penney (Commercial due diligence); Grant Thornton, Peter Mounsey, Alan Dale (Operational due diligence); Highwire Consulting, Annie Gray (Management due diligence).
Management – Browne Jacobson, Nigel Blackwell, Paul Simpson (Legal).
Debt – Mills & Reeve, Zak Virgin (Legal); Gateley, Richard Sealy, James Benson (Legal).