Catalyst advises LDC on the secondary buy-out of Addo Food Group

Catalyst has advised LDC and the management team on the secondary buy-out of Addo Food Group (Addo) the UK’s leading chilled savoury pastry producer, from Vision Capital.  Details of the transaction are not disclosed.

Headquartered in Nottingham, 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 in Nottingham, Market Drayton, Spalding, Poole and Shaftesbury. 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 Food’s £100m chilled savoury pastry operations.

Catalyst Corporate Finance has known the business for some years , and has also worked with LDC on a number of transactions.  Catalyst worked closely with the management team and LDC to execute the secondary buy-out and deliver one of the most high profile deals in the East Midlands this year. Catalyst worked on all aspects of the transaction including overall deal structuring, project management, exit planning and raising unitranche debt and working capital facilities.

LDC has invested to support Addo’s growth strategy, which will include further investment in product innovation, expansion into new markets through organic growth and potential acquisitions in adjacent markets. Private investment fund Fullbrook Thorpe Investments LLP, which is backed by Andy Leaver (former majority owner of Clinigen Group), invested alongside LDC.  Addo will continue to be led by its existing management team, headed up by Group Managing Director, Chris Peters.

Simon Peacock, Head of Consumer and Justin Crowther, Partner at Catalyst, were lead advisers on the transaction supported by Mike Falzon, Principal as well as Andrew Shellard and Guy Taylor both in Catalyst’s debt advisory team. Andy Grove, John Green, and Victoria Marcer led the deal for LDC. Both Andy and Victoria will join the Addo board as non-executive directors.  Paul Monk will also join Addo as non-executive chairman. He is currently non-executive chairman at Seabrook Crisps and has previous experience with Mars, Golden Wonder, Finsbury Foods, Quorn and Burton Biscuits.

Simon Peacock, Director at Catalyst who led the deal with Justin Crowther, Partner commented: “Addo is a market leading food business with a strong position in the UK’s chilled savoury pastry market, with a loyal consumer following for its well-known brands.  The business has consistently outperformed over its long trading history, producing high quality foods and an extensive range of products.  We are delighted to have advised LDC and management on this fantastic business which has a very strong platform for future growth.”

The completion of the Addo transaction is the ninth deal led by Catalyst in the last two months with recent activity including the £325m acquisition of Travelopia, the sales of Thompson & Morgan and UK Heating Group, as well as the buy out of Global Freight Solutions.

Andy Currie, managing partner of Catalyst commented: "The completion of the secondary buy-out of Addo is the culmination of hard work from the team at Catalyst and the strong relationships that we have with management teams. The M&A environment remains buoyant and we expect this to continue for the next 12 months as the supply of capital currently exceeds demand, creating varied options for owners and management teams alike.”

Other advisers included Eversheds in Nottingham which acted as legal advisor to LDC, while Deloitte in Birmingham provided tax advice. Browne Jacobson in Nottingham acted as legal advisors to management. Commercial due diligence was completed by Food Strategy Associates and operational due diligence by Lauras. Vision Capital were advised on the transaction by Houlihan Lokey, KPMG and Macfarlanes.

The business has been supported with new debt facilities provided by Guggenheim with existing working capital facilities rolled forward by PNC.

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