European food manufacturer invests in fast-growing cake specialist
LDC has exited its investment in Bristol food manufacturer Cakesmiths with a sale to European food group Onore.
In the two years since LDC invested, Cakesmiths has increased revenues from £9m to around £23m and nearly doubled the workforce to more than 200 people.
The deal value has not been disclosed but LDC revealed it has generated a 3x money multiple return and IRR of 81% for LDC.
Onore, which was previously known as Boncolac, is a major player in frozen pastries and snacking products.
Cakesmiths chief executive Chris Ormrod, who joined when LDC invested in March 2022, will continue to lead the business. It will trade under its current branding as part of the Onore Food Group.
Ormrod said: “It’s hugely satisfying to look back on everything we’ve achieved in the last two years, and we’re delighted to become part of the Onore Food Group – a move that will help our long-term growth ambitions.
“Demand for our amazing cakes shows no sign of slowing and we’re now perfectly positioned to share them with more people around the world as part of Onore.”
Cakesmiths is an independent manufacturer of artisan handmade cakes, supplying customers across the UK through its direct-to-market online platform and through direct relationships with large independent coffee shops.
It invested more than £2m to scale its operations and invested heavily in sales and marketing, including a successful rebrand. Cakesmiths has also grown its e-commerce offering during the LDC partnership, with online sales in H1 2023 more than double its online sales for the entirety of 2021.
LDC investment director Stefan Gunn, who led the transacation alongside James Garland, added: “Cakesmiths’ rapid growth is all down to the team’s passion for their cakes and commitment to innovation and service excellence.
“Together, we quickly identified the online platform as an essential channel to drive growth, and it’s wonderful to see it become an even more important part of the business’ offering, with almost 70% of Cakesmiths’ volumes being ordered online and delivered next day.
“They are now ready to fly the flag for the city internationally, and we wish them every success.”
LDC and Cakesmiths were advised by KPMG (M&A Advisor), TLT (Legal) and RSM Corporate Finance (Financial). Management advisers were UGCC (French legal), Trowers and Hamlins (UK Legal), KPMG (tax) and Momentum CF (management advice).
