Investors take a stake in confectionery wholesalers in £20m deal

INVESTORS have taken a stake in Kitwave Wholesale, owners of Bradford and Huddersfield businesses.

The group has raised funds from lead investor Picoa Capital, with a new investor entering the mix in co-investment partner Allstate.

For a minority stake, the business has opened up funds to enable it to continue on the acquisition trail, having acquired 11 businesses since 2006.

Kitwave already owns the Bishops depot in Bradford and Huddersfield’s Teatime Tasties. It supplies sweets, alcohol, soft drinks and ice cream, amongst others, to retailers across the UK.

In March 2011, NVM invested £7.5m in the business to support its continued growth through consolidation.

In 2014, Kitwave broke into The Sunday Times Top Track 250 and was invited to join the London Stock Exchange Elite scheme for fast growing companies.

Paul Young, chief executive of Kitwave, said:”This deal marks the start of the next chapter of our growth story, which sees revenues on track to reach in excess of £260m in the current financial year.

“This new investment will allow us to develop further in some key focussed areas and we are excited about delivering on our ambitious expansion targets for the future. “

Donald Campbell, senior vice president, Pricoa Capital Group, added: “We are delighted to have the opportunity to finance Kitwave on this recapitalisation with Allstate as a co-investment partner.

“With a well-defined strategy, Paul and his management team have succeeded in building a diversified nationwide wholesale business and have clear plans for continued growth and expansion, which we are looking forward to supporting.”

Professional services firms KPMG and Muckle advised Kitwave’s shareholders on the deal.

Rod Wilkinson, associate partner in KPMG’s Northern Corporate Finance practice, said: “This funding deal gives NVM Private Equity a strong exit, delivers Kitwave with the platform to continue its growth strategy and offers Pricoa and Allstate an investment in a business with a strong track record and a pipeline of planned acquisitions.”

The deal also sees Kitwave maintain its longstanding relationship with Barclays, which has supported the business from inception, in conjunction with a new association with Yorkshire Bank.

David Collins, Barclays relationship director said:”Barclays has been the banking partner of Kitwave since the company was established in 1987 and this transaction is both a significant and pivotal milestone in Kitwave’s history as it paves the way for further expansion and growth.”

Matt Henderson and Jonathan Steed from Deloitte provided financial vendor due diligence and Andrew Coticelli provided tax vendor due diligence.