Addo Food Group

Deal summary

Headquartered in Nottingham, Addo Food Group (Addo) produces more than 287 million packs of chilled savoury pastry products every year. The business manufactures a range of own brand and branded products including sausage rolls, hot pies, slices, pork pies, scotch egg products and quiches, which it supplies to the UK’s leading names in food retail including all the major supermarkets. Alongside its market-leading ranges of premium pastry products such as Tottle pork pies, Walls savoury pastry and Pork Farms pork pies, the business launched its ‘Too Good to Be’ range of gluten-free sweet and savoury pastry products last year – the first of its kind.

With a trading history that dates back more than 160 years, Addo employs more than 2,500 people and operates across six UK sites. The business was acquired by Vision Capital from Northern Foods in 2007 and traded as Pork Farms Group until 2015 when it changed its name to Addo Food Group. In 2014, the company completed the acquisition of Kerry Foods' £100m chilled savoury pastry operations. In 2017, Vision Capital looked to realise a return through a range of liquidity options including a secondary management buy-out.

What difference did we make?

Having known the business for some years, LDC asked Catalyst to advise on the buy-side owing to our experience and credentials in the food and drink market and working with management teams with a range of expansion plans. Our M&A role encompassed advising LDC on bid tactics, deal structure and entry pricing up until the point where they had won exclusivity. Catalyst then sat alongside the LDC team supporting on all aspects of the deal, project managing the transaction, challenging the vendor due diligence, assessing the commercial and financial impact of various customer plans, and preparing an exit paper to support the LDC investment case.

We assisted the management team to produce a business plan supported by a detailed operating financial model to underpin the investment and banking process. In particular, the plan looked at how the business assessed a range of different growth opportunities available and a number of operational investments.

Our Debt Advisory team worked alongside our M&A team to deliver LDC a market leading debt package to help fund the transaction. Our role included advising LDC on the most relevant lenders to approach, identifying the most efficient structure, managing the various debt providers, negotiating a best in class outcome and ensuring that LDC’s and Addo’s interests were protected as far as possible in the documentation stage.

A select group of banks and debt funds were approached and competitive tension maintained throughout the process. Having reviewed the offers, we advised LDC that their best option was a combination of term debt from a single debt fund, to provide the ability to support potential future acquisitions, and the incumbent provider for more efficient working capital facilities. Terms were negotiated with Guggenheim and PNC.

A number of factors made this a particularly challenging transaction, however we were able to successfully navigate these issues and deliver a great outcome for all stakeholders.

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What our client said
"Thanks to Catalyst for all the work that you did on this project. Pragmatic, realistic, honest and very patient when we changed things around. A great result." Graham Rutter, Finance Director
Addo Food Group