ICG backs Symington’s MBO

FOOD manufacturer Symington’s has undergone a management buyout supported by investment firm Intermediate Capital Group.

The MBO, the second by the existing management team, has been led by chief executive David Salkeld and sees the exit of Bridgepoint following five years of involvement with the Leeds-based firm.

AIM-listed ICG is investing junior debt and equity, and will hold a minority stake of 49.9% in the food company, with the existing management team taking 50.1%.

The deal has been supported through a £75 debt package provided by Royal Bank of Scotland, Lloyds and HSBC and sees Symington’s leave Yorkshire Bank.

Funding generated through the MBO will be used for working capital and to help complete bolt-on acquisitions.

Mr Salkeld said: “These are tough but exciting times for the grocery market, and we want be sure that Symington’s continues to play a leading role through category and product innovation and continued investment in its product and retailer brand plans.

“We are delighted to partner with ICG, who took a different approach and have provided us with a unique financing structure which will give us a strong platform for future growth and expansion. The funding from RBS is instrumental in allowing us to pursue our corporate goals and I thank them for their support.”

Gareth Knight, investment director of ICG said: “We are delighted to be partnering with the Symington’s management team. The business has a culture grounded in entrepreneurial spirit and hard work, which has driven a strong growth trajectory in recent times.”

Mark Stroud, director at Bridgepoint, said: “Symington’s grew substantially during our period of investment, having made a number of strategic acquisitions and concluded an important partnership with Campbell’s. It is now well placed to continue growing with a new investment partner.”

Mr Salkeld revealed earlier this year how the company was considering refinancing options to raise funds for potential acquisitions from Britain’s biggest food manufacturer, Premier Foods.

Symington’s, which can trace its history back to 1827, has sites in Leeds and Bradford and employs around 600 people.

It has plans to expand its headquarters at Cross Green, Leeds, and is forecasting turnover growth of £50m this year to £175m.
 
Symington’s has a portfolio of brands including Ragu, Chicken Tonight, Campbell’s and Ainsley Harriott.

Symington’s bought the Quosh brand from Britvic for an undisclosed amount earlier this year.

Bridgepoint and the management’s shareholders were advised by Rothschild Leeds (Stephen Griffiths, Matthew

Jowett, Rob Dunnett, Amy Bashforth) with legal advice provided by Travers Smith.  

The management team was advised by PwC (Stuart Warriner, Nicola McQuaid, Andrew Kerr) and Walker Morris (Richard Naish and John Hamer). 

Vendor due diligence was provided by KPMG (Chris Stott and Nicola Merritt). 

Mr Stott, transaction services partner at KPMG in Leeds, said: “David and the team have built an excellent business which has seen an increased growth trajectory in recent years through real consumer focused innovation and brand development, teamed with focus on core food values and strategic acquisitions.

“We were pleased to be able to verify and showcase this growth story through the due diligence and to help attract ICG as the ideal new equity partner to support the business through the next exciting chapter.”

ICG is of the largest independent mezzanine funding providers in the world with investment portfolios in Europe, Asia Pacific and the US. It also provides leveraged credit and equity services and manages billions of pounds of assets.

Ronnie Brown, relationship director at RBS Corporate and Institutional Banking in Yorkshire, said: “We are pleased to provide new financing to Symington’s, supporting a major Yorkshire manufacturing business.
 
“Symington’s is an innovative company, with its products competing with many of the top brands in their fields, and has been a spectacular growth story.”