LDC sells Ministry of Cake to Equistone's Mademoiselle Desserts

The sale represents a 2.3x money multiple for the vendor, which first invested in the company almost three years ago.

The deal comes shortly after Mademoiselle Desserts acquired Quality Pastries, a Dutch producer of chilled and frozen pastries for retailers, restaurants and home service companies. Other previous bolt-ons by the business include UK-based Speciality Desserts – now known as Mademoiselle Desserts Corby – in 2012, and The Handmade Cake Company two years later.

Since LDC's initial investment in Ministry of Cake, the company has expanded via the acquisition of Torquay-based The Creative Foods, which increased the group's production capabilities by 30% and diversified its product range. It also increased its sales across Europe, Russia and the Middle East, with exports growing by 10% during the GP's tenure.

At the time of LDC's initial investment, Ministry of Cake had a headcount of 250 and generated revenues in the region of £25m, according to unquote" data. Today the business generates a turnover of £30m and has a headcount of 400, according to a statement issued by the GP.

Following this acquisition, Ministry of Cake's management team, led by CEO Chris Ormrod, will remain in their current roles and will take a stake in Mademoiselle Desserts.

Equistone acquired Mademoiselle Desserts (at the time known as Européenne des Desserts) in October 2013 from Azulis Capital and Céréa Gestion, in a deal reported by unquote" to be worth in excess of €100m.

Previous funding
Ministry of Cake first received private equity backing in September 2005, when Matrix Private Equity invested £2.1m in support of the management buyout of Maynard Scotts. Two years later, the GP divested the company to trade buyer Greencore Group for £12m, reaping a 2.5x return and IRR of 58%.

LDC then backed the management buyout of the company, by then rebranded as Ministry of Cake, from Greencore in May 2014. It then provided finance to the company four months later to support the acquisition of The Creative Foods.

Company
Originally founded in 1865 as WT Maynard & Son, Taunton-based Ministry of Cake produces cakes and desserts for restaurant chains, pubs and coffee shop chains.

People
LDC – Alistair Pendleton (head, south-west and Wales); Peter Latham (investment director).
Ministry of Cake – Chris Ormrod (CEO).
Mademoiselle Desserts – Didier Boudy (CEO).

Advisers
Vendor – Deloitte; Martyn Gregory (corporate finance); Osborne Clarke, Alisdair Livingston (legal); KPMG, Kay Drury (financial due diligence).
Management – Momentum Corporate Finance, Alastair Boorman (corporate finance).

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