TSC serves up Glorious exit for KCP

KEY Capital Partners (KCP) has sold food manufacturer TSC Foods to one of the UK’s largest family owned businesses, Edward Billington and Son.

Scunthorpe-based TSC Foods, which was founded in 1991, produces and supplies chilled and frozen sauces, soups, entrees and dressings to the retail and food service markets. The business has enjoyed the success of the branded soup market through its development of the Glorious! soup range, which is sold in Morrisons, Asda and Sainsbury’s supermarkets, as well as the Co-op and Ocado.

The Billington Group is headquartered in Liverpool and consists of a growing family of trading and manufacturing companies, with a range of products and services in the food and agriculture sectors. The group has over 150 years’ of trading experience with operations across the country.

As part of the deal, TSC, which operates nationally from offices in Leeds, Birmingham and London, will continue trading as normal with all 400 employees remaining at its North Lincolnshire base.

Christian Mayo, Giles Taylor and James Murray at KPMG Leeds provided corporate finance advice to the company, while Sean FitzGerald and VictoriaZivkovic at Linder Myers in Manchester provided legal advice to KCP. Will Oxley and Andrew Baldwin of Grant Thornton in Leeds provided vendor due diligence.

Giles Taylor of KPMG said: “The interest generated in TSC from private equity and trade buyers is testament to the business’s position at the forefront of chilled and frozen food product development. Market consolidation is driving food and drink sector activity, particularly among independent manufacturers which have a strong presence across the North of England and we expect this trend to continue well throughout 2014.”

In July 2009, KCP backed the management buyout of the business in a deal that valued the company at £17m. Since then the company has increased turnover by almost 50% to just under £50m in the year to December 2013. The sale will provide KCP with a 3.5x return on investment.

Peter Armitage, investment partner at KCP and director of TSC Foods, said: “TSC has shown impressive growth in both sales and profitability over the last few years. The management team has continued to invest in the production side of the business and developing the Glorious! brand in order to satisfy the demands of its growing customer base. Although it has been a pleasure working with a first-class management team it is the perfect time for us to be handing over to The Billington Group. We know the company will be in good hands.”

David Bondi, managing director at TSC Foods, said: “Working with KCP has been a really good experience for TSC and the management team. KCP’s support has enabled us to provide all the resources needed to grow the business through innovation, service and quality, along with developing the Glorious! brand rapidly in a challenging market. We are looking forward to working with The Billington Group which is an excellent fit for TSC in every way.”

Key Capital Partners is an investor in the smaller buy-out market making investments of between £2m and £10m in companies with enterprise values of up to £40m. The firm has invested over £60m since its launch in 2007. Its portfolio includes TSC Foods, Neville Johnson, the luxury fitted furniture group, Gear4Music, the online retailer of musical instruments and NursePlus, a business providing nurses and care workers into the healthcare sector.