Confirming widespread media reports, the industry insider told FoodManufacture.co.uk it was “certain” a deal between Addo and LDC would be agreed imminently.
“I am certain Addo is about to be sold to LDC, backing the management team under Addo md Chris Peters,” the industry expert told FoodManufacture.co.uk.
“I saw a rumoured £100M [price tag], which, given the number of sites [six] and a turnover of something like £250M, is not an unreasonable figure.”
“£100M price tag”
If the deal goes ahead, LDC might face challenges to sell the business in three to five years, in line with its business strategy for previous acquisitions, as none of the obvious trade buyers were interested in Addo at the moment, the expert said. The manufacturer’s factories were all old, and probably leasehold now, it added.
Addo’s owner, private equity firm Vision Capital, invested in the savoury pastry manufacturer in January 2007. The firm was under pressure to “wrap up the fund” and sell Addo, in line with its own strategy, said the source.
“If Addo is sold, Vision Capital has managed an exit at the end of their 10-year tenure so can return funds to investors.”
Addo Food Group, LDC and Vision Capital declined to comment on the manufacturer’s potential sale.
Vision Capital’s own-label desserts manufacturer Park Cakes was also sold last month in a management buyout. The private equity firm said it was pleased to realise its investment, after the deal was completed last month.
‘The thick end of £100M’
Addo – owner of the Pork Farms, Wall’s and Millers brands – reported earnings before taxes, depreciation and amortisation of £15M last year. The company’s debt was “at the thick end of £100M, so they will have done well to clear that on a sale”, the expert said.
The maker of sausage rolls, pork pies and pasties supplied about 256M products a year, for its branded and own-label ranges.
Meanwhile, last month Addo’s Riverside Bakery revealed plans to axe 44 jobs, to secure the company’s long-term future.
- Addo “certain” to be sold to LDC
- About £100M
- Deal to finalise “imminently”