Private equity deal for R&R Ice Cream
R&R Ice Cream has been bought by private equity firm PAI Partners for an undisclosed sum.
North Yorkshire-based R&R’s senior management team, including chief executive and executive chairman James Lambert, will continue to lead the business and are also investing in the company.
The deal provides an exit for Oaktree Capital Management. R&R Ice Cream was created in 2006 by Oaktree Capital Management merging Yorkshire-based Richmond Foods with Roncadin, the largest private label manufacturer in mainland Europe.
It was also announced today that R&R Ice Cream is considering the future of its Crossgates site in Leeds, which employs 135 staff.
R&R is Europe’s leading supplier of own-label ice cream with a branded portfolio including Nestlé, Skinny Cow, YooMoo frozen yoghurt, Kelly’s of Cornwall and Disney.
It recently bought ice cream maker Fredericks Dairies for £49m.
Mr Lambert said: “We are very excited to be partnering with PAI and working together on our next phase of development as we continue with our growth strategy across our brands. We have benefitted immensely from working with Oaktree and I would like to thank them for their support.”
Colm O’Sullivan, partner at PAI Partners, said: “R&R is a market-leading company with a strong portfolio of innovative products and excellent potential to expand in the UK and internationally.
“The food and consumer brands sector is a core area of investment focus and expertise for PAI and we are delighted to be investing in R&R. We look forward to working closely with the company’s management and supporting the company’s continued growth.”
Jim Van Steenkiste, managing director at Oaktree, said: “Our partnership with R&R has been very successful. We are delighted to have supported the company in achieving significant growth since our investment in 2006 and an enhanced market position.
“The company today is a leader in its sector and is well-positioned for future growth. We wish R&R every success in its new relationship with PAI.”
Barclays acted as sole financial advisor to Oaktree. Rothschild and Credit Suisse advised PAI Partners.
Since 2006, R&R has acquired a number of ice cream businesses including Rolland and Pilpa in France, Durigon in Germany and Eskigel, Italy’s largest own-label ice cream manufacturer.
Today, the company has 11 production sites across the UK and mainland Europe. Revenues for the year ending 31 December 2012 were approximately €600m.
PAI Partners said it would support R&R through its next phase of growth, investing in the expansion of the company’s international footprint and renowned consumer brands.
Meanwhile, R&R Ice Cream has announced that the company is considering the future of its factory at Crossgates in Leeds as part of a strategic review.
A spokesman for the company said: “As part of this review it has been necessary to analyse factors such as operational capability, production and distribution costs in the UK and mainland Europe.
“One of the options being examined is the closure of the Crossgates site and transferring production to our other factory at Leeming Bar in North Yorkshire.
“Whilst R&R has been manufacturing at Crossgates since 1997 and has invested some £23m in the site over the years in manufacturing plant and equipment, the fabric of the buildings is now in need of considerable investment. In addition, the area is now increasingly residential in nature which means it is becoming much more difficult to manufacture without upsetting residents.”
“We hope to avoid redundancies as there will be job opportunities at Leeming Bar for all staff working at Crossgates, should they chose to take them.”
“We are now commencing the statutory 45-day consultation programme with a view to reaching agreement on any proposed closure and mitigating the effects of any job losses.”
R&R acquired the Crossgates site from Treats Ice Cream after that business merged with what was Richmond Ice Cream. One hundred and thirty-five people are employed at the site.