MBO serves up perfect recipe for TSC Foods

A LEADING manufacturer of soups and sauces supplied to retailers including Morrisons has been bought by its management in a £24m deal.

The Leeds office of private equity firm, Key Capital Partners and Yorkshire Bank have backed the management buyout of TSC Foods, which is also behind a range of soups endorsed by chef Marco Pierre White.

Five long-serving members of TSC’s management team and new managing director, Jonathan Skofic, have completed the MBO of the business from previous managing director, Bill Morran, and fellow shareholders.

KCP has invested £6m for a majority stake in the business, alongside senior debt facilities of £11m provided by Yorkshire Bank’s corporate and structured finance team.

Scunthorpe-based TSC, which employs around 300 people and has annual turnover of around £35m, produces and supplies chilled and frozen sauces, soups, entrées and dressings to the retail and food service markets.

It is a key supplier of private label soups and sauces to supermarket Morrisons and also supplies products to a number of restaurant and pub chains, including Mitchells & Butlers, Whitbread and Tragus.

In 2008, TSC entered the branded chilled soup market through its development of the Glorious! fresh soup range, which is endorsed by celebrity chef Marco Pierre White.

The company now plans to continue the roll-out of this brand across all of the grocery chains, having already established a presence in Morrisons, Waitrose and Sainsbury’s.

Mr Skofic, who has spent the majority of his career with beverage company Cott Beverages, said the deal would allow TSC to grow further.

Mr Skofic said: “The company’s existing management team has done a tremendous job in driving TSC to its current, market-leading position.
 

“With the support of KCP and Yorkshire Bank, we now have the additional operational and financial support required to move to the next level.”

The KCP team was led by partner, Peter Armitage, and investment director, Mark Buttler.

Mr Armitage said: “We are delighted to be investing in TSC, a company with a reputation for excellent service, high quality and innovative market-leading products.

“With a talented and experienced management team, supplemented by a new managing director, we are confident that TSC will continue to grow and be in a strong position to take advantage of any upturn in consumer and business confidence over the medium term.”

Peter Smith, director with Yorkshire Bank Corporate and Structured Finance, said: “TSC has seen impressive growth over the past two years through careful control of costs and its policy of developing partnerships with clients.”

A team from the Leeds office of Cobbetts , comprising Sean Fitzgerald, Abbie Robinson and Nia Bryan, provided legal advice to KCP.

Will Oxley and Jonathan Steed from the Leeds office of Grant Thornton provided financial due diligence advice.

Sebastian Chambers and Claire Wring of CIL carried out commercial due diligence, while Paul Quinn and Mike Styles of The Quinn Partnership conducted management due diligence.

Matthew Bryden-Smith and Ashley Haworth at Rickitt Mitchell provided corporate finance advice and deal management to the MBO team.

Jon Close at DWF provided legal advice to the new management team, while the vendors received corporate finance advice from Patrick Groarke of Livingstone Partners and legal advice from Steve Trynka at Hull-based Rollitts.

Yorkshire Bank was advised by Dean Gormley of law firm, Halliwells.

Exiting shareholders of TSC have also rolled over a proportion of their consideration into loan notes and equity in the company.