Argos Soditic buys Natural Distribution

Greg Gille
24 April 2013

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Argos Soditic has backed the buy-in management buyout (BIMBO) of UK-based food supplements specialist Natural Distribution.

This marks the third acquisition for Argos's Euroknights Fund VI, which closed on its €400m hard-cap at the end of 2010. The vehicle notably invested in the all-equity buyout of Italian firms FIS and Antex in February.

The investment in Natural Distribution is also the first foray into the UK for Argos, which usually backs businesses based in France, Italy and Switzerland. Natural Distribution was however founded by two French citizens and generates the bulk of its activity in France.

The deal was initiated as the sellers wished to pass the business onto the management team, led by Nigel Henton alongside a new financial director and business development director. The vendors mandated a French M&A consultancy, Messis Finances, in the summer of 2012 to run an auction process for the business.

Argos secured a majority stake in the buyout, with both the vendors and the management team retaining minority stakes.

Natural Distribution plans to keep growing organically via the launch of new products and an increase in the number of retail points. The business will also look to generate more exports going forward. Acquisitions will not be considered for the time being.

Debt
Idinvest, Access Capital Partners and IFE Mezzanine provided a unitranche facility understood to be worth around €20m to finance the buyout. This marked the first time that Argos used unitranche to finance one of their deals, with the main attraction being the ability to preserve cash flows throughout the course of the holding period to finance growth.

Although undisclosed, the leverage ratio was described as moderate, in line with Argos's usual practices.

Company
Founded 25 years ago, Natural Distribution develops and markets food supplements. Its products are based on plants and other ingredients of natural origins.

Based in Ashford, the business employs 124 people and generates revenues of around €32m.

People
Gilles Mougenot and Karel Kroupa led the deal for Argos Soditic. Maryse and Jean Estienne are co-founders of Natural Distribution.

Advisers
Equity - KPMG (Financial due diligence); SJ Berwin (Legal); Arsène Taxand (Tax); PDG Avocats (Regulation due diligence).
Vendors - Messis Finance (M&A); PDGB Avocats (Legal).
Debt - Nabarro & Hinge (Legal).