£17m deal for Cranswick’s pet businesses
FOOD manufacturer Cranswick has sold its pet businesses to a management buyout team backed by Lloyds TSB Development Capital for £17m.
Hull-based Cranswick said the deal would allow it to reduce group borrowings ahead of the completion of the deal to buy rival sausage firm Bowes of Norfolk for £17.2m.
The team behind the purchase of Cranswick Pet & Aquatics, which consists of trading businesses Cranswick Pet Products (CPP) and Tropical Marine Centre (TMC), includes Cranswick board director Derek Black, TMC managing director Paul West and other members of the management teams.
CPP, based in Driffield, East Yorkshire, is the UK’s leading manufacturer and distributor of wild bird food products and accessories and has brands including Nature’s Feast, Bucktons and Cheeky Boy. It has a history dating back to 1789 and also manufactures products for small animals and cats and dogs.
TMC, which Cranswick bought in 1995, is the UK’s largest supplier of tropical marine fish and associated aquatic accessories and fish food.
Headquartered in Chorleywood, Hertfordshire, it is also the UK’s leading manufacturer and distributor of innovative commercial filtration equipment.
The deal with LDC will provide capital to help support the continuing growth of both CPP and TMC through new products, new channels to market and by developing the export market further.
The transaction was supported by a package of senior debt and working capital facilities provided by Lloyds TSB Corporate Markets’ acquisition finance team.
Mr Black, chief executive of Cranswick Pet & Aquatics, said: “LDC’s investment reflects the confidence we both have in our future potential and looking forward, their support will allow us to strengthen our market leading position, invest for future growth and continue to provide quality service for all our customers, existing and new.”
John Swarbrick, director of LDC’s Yorkshire office, said: “Essentially, we are backing a first rate management team who have built a market leading business, which, we believe is not only resilient to the challenging economy but is also well placed for future growth.”
Rob Lawrence, director of Lloyds TSB Corporate Markets acquisition finance team in Yorkshire, said: “Cranswick Pet & Aquatics has a strong trading history and the deal with LDC will give the business the funding and strategic input needed to take it on to its next phase of growth.”
“This transaction highlights that both debt and equity funding is available in the current market to support talented management teams who have built strong businesses with the potential for significant future growth.”
The deal is expected to complete this Friday when Mr Black and the rest of the management team will leave Cranswick.
Cranswick will retain a 5.5% share in Cranswick Pet & Aquatics.
Martin Davey, chairman of Cranswick, said the gross assets being disposed of amounted to £22.9m as at September 30, 2008 with net assets of £17.2m.
Profit before exceptional property gains attributable to those assets for the year to March 31, 2008 was £1.9m.
Mr Davey said: “We would like to take this opportunity to thank Derek and Paul and all the employees of CPP and TMC for their contribution to Cranswick over many years and to wish them all the best in their new venture.
“Cranswick is now wholly focused on its food activities and will continue with its strategy to grow both organically and through acquisition as demonstrated by the recently announced acquisition of Bowes.”
Richard Townsend, relationship director, Lloyds TSB Corporate Markets in Yorkshire, who will be leading the day-to-day banking relationship, added: “I’m delighted that we’ve been able to support Cranswick Pet & Aquatics in their latest plans.
“We’ve been working with the business for over four years developing a strong understanding of this key, Yorkshire-based pet food manufacturer and look forward to continuing the relationship as the team continue to drive the business going forward.”
Cranswick announced earlier this month it was to buy Bowes, which is one of Norfolk’s longest standing family owned businesses specialising in pig-rearing and pig meat processing.
The deal is expected to complete in June.
Advisors on the Cranswick pet & Aquatics deal:
Advisors to LDC:
Commercial – PwC
Financial & Tax – Deloitte
Legal – Freeth Cartwright
Insurance – AoN
Management DD – Egon Zehnder
Advisors to Management:
Corporate Finance – Bishopsgate
Legal – Brown Jacobson
Advisors to Vendor:
Legal – Rollits
Advisors to Lloyds TSB Corporate Markets acquisition finance
Legal – Eversheds
