Peters Food Service Ltd (United Kingdom) - Nov 2007

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01 November 2007

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NBGI Private Equity has completed the £20m management buyout of pastry product business Peter’s Food Service Ltd from its private vendors. NBGIPE invested £6m, its first investment from its £100m second fund, alongside a senior debt package consisting of term loan, invoice discounting and property mortgage, provided by Peter’s longstanding bankers Royal Bank of Scotland. Daines Corporate Finance was working with the incoming managing director to identify an opportunity in the chilled food sector and had already started discussions with the vendor when NBGIPE was introduced to the deal. Daines approached NBGIPE due to its experience in the chilled foods sector – earlier this year it recouped 4.3x its money from the sale of sandwich manufacturer and distributor Brambles Foods (23 April 2007, page 37). NBGIPE won an informal process which took just over two months to finalise from exclusivity and sees NBGI taking a majority stake.

NBGIPE was attracted to the deal as it sees a number of opportunities for organic growth. These include increasing own label products to supermarkets, further developing the Peter’s brand and extending the product range and customer base of its food service division.

Company

Established in 1970, Peter’s was acquired by the exiting vendors from Grand Met in 1997. It is headquartered in Bedwas, South Wales where its manufacturing operation produces more than 100 million pastry products per year. Peter’s manufactures and distributes savoury pastry products such as meat pies, pasties and sausage rolls that are sold at outlets including supermarkets, football grounds and fish and chip shops. Peter’s generates revenues of £54m and has a staff of 640.

People

Richard Morley led the deal for NBGIPE with Richard Babington. Morley joins the board of the newco. John Griffiths is the retiring shareholder. His son, Justin Griffiths, takes on the role of food service director. Mike Grimwood, formerly an executive of Northern Foods, becomes managing director. Nick Evans led the deal for Royal Bank of Scotland.

Advisers

Debt - Eversheds, Beth Evans (Legal)Equity - Candesic, Clare Connell (Commercial Due Diligence)Equity - Cardinal, Katy Lindsay (Other Due Diligence)Equity - Geldards, Ben Johnson (Legal)Equity - Tenon Corporate Finance, Julian Clough (Financial Due Diligence)Equity - Wilsons, Steve Exwood (Insurance Due Diligence)Management - Dains, (Corporate Finance)Management - Nabarro, Ben Hendry (Legal)Vendor - Gambit, Godfrey Ainsworth (Corporate Finance)Vendor - M&A Solicitors, Alan Whitely (Legal)