Fast growing group, Kitwave Wholesale has completed a refinancing deal which sees the business raise funds from lead investor Pricoa Capital Group and a co-investment partner Allstate, for a minority stake, in order to continue pursuing its acquisition strategy. The transaction also provides an exit for NVM Private Equity, which invested in the business in 2011.
Kitwave, founded by CEO Paul Young, in 1988, has transformed itself from a regional confectionery based business to a diversified, national wholesaler through 11 acquisitions since 2006. The group has built a reputation for excellence in service quality, product availability and customer relationship and has a strong foundation for the future. As well as now having nationwide delivery capability the group has expanded to offer frozen, ambient and own label products to the independent retail, vending and food service sectors.
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, more recently the Group has entered the prestigious Grocer’s ‘Big 30′ ranking for the first time as the 15th largest UK based wholesaler.
Paul Young, CEO of Kitwave, comments on the deal: “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. During the last five years, since the NVM investment, we have made strategic acquisitions that have taken us into new markets, geographies and product ranges. During this time the business has also invested heavily in its infrastructure, IT and importantly in its senior management team. 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, adds: “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. This transaction and our on-going engagement with Kitwave exemplify the relationship-focused approach that underpins Pricoa Capital Group’s financing of entrepreneurial management teams with strong track records in the UK mid-market.”
Newcastle advisors KPMG and Muckle advised Kitwave’s shareholders on the deal.
Rod Wilkinson, who leads KPMG’s Corporate Finance practice in Newcastle, says: “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.”
Hugh Welch, Senior Partner, Muckle LLP, says: “This is a great deal for Kitwave and for the North East. Our region needs thriving and ambitious companies and inspirational business leaders. Paul, his team and the company epitomise these qualities and I am delighted that Muckle LLP played a part in helping this transaction to happen. I am certain that growth, job creation and further investment will flow from it.”
Mauro Biagioni of NVM Private Equity said: “Kitwave has been a very successful investment for NVM and its funds and is now well positioned for its next phase of growth. It has been a pleasure working with Paul, David and the wider management team, and we wish them every success for the future.”
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. A highly professional and progressive brand that is thriving; the management’s ambitious growth plans is testament to their success and we’re delighted that we’ve been able to support with funding for their further development.”
Charlie Barker, Senior Director in Yorkshire Bank’s Leeds based Specialist and Acquisition Finance team, said: “We’re pleased to announce our support for Kitwave and we look forward to working in partnership with Paul and the management team to continue the company’s impressive growth.”
For further media information:
Alison Anderson, Corporate Communications, KPMG
T: 0113 254 2980 E: firstname.lastname@example.org
Justin Barlow, Director of Business Development, Muckle LLP
T: 0191 211 7907 E: email@example.com
Principals and key advisors to the transaction:
Kitwave Group / shareholders (Paul Young, David Brind) NVM Private Equity (Mauro Biagioni). Advised by:
KPMG Corporate Finance (Rod Wilkinson; James Murray; Michael Downes; Nick Broadhead) – deal advisory
Muckle LLP (Hugh Welch) – legal
Javelin Group (Michael Fine) – commercial due diligence
Deloitte LLP (Matt Henderson) – financial due diligence
Pricoa Capital Group (Donald Campbell; Ed Jolly; Jack Gilbert) and Allstate (Gonzalo Erroz; Sharad Todi). Advised by:
Morgan Lewis (Tom O’Connor) – legal
Newco/ Management (Paul Young; David Brind; John Hope). Advised by:
Liberty Corporate Finance (Steve Thomson) – corporate finance
KPMG Debt Advisory (Peter Bate; Chris Lloyd) – debt
KPMG Tax Advisory (Michelle Wilson; Graeme Whitfield; Brad Keast) – tax structuring and personal advice
Muckle LLP (Mike Spetch; Louise Duffy; Jess Swindells) – legal
Barclays Bank (David Collins and Dan Hurst) and Yorkshire Bank (Mike Selina and Charlie Barker). Advised by:
Eversheds LLP (Kathryn Walters) – legal
Kitwave Wholesale Group is an independent wholesale business, comprising 11 companies with 500 employees, 15 depots and delivery capability throughout the UK. The business specialises in the sale of confectionary, frozen food, groceries, snacks, soft drinks, wine and beer, and tobacco.
Customers include convenience stores, hospitality sector, leisure centres, wholesalers and vending operators in the UK and internationally.
About Pricoa Capital Group
Pricoa Capital Group has been a leading provider of private capital to companies for more than 75 years, investing private debt and equity from its local office network in North America and Europe. Pricoa manages a portfolio of more than US$73 billion (as of 30/12/15) investing up to US$12 billion in private capital annually in companies worldwide. Pricoa has established itself as a premier capital partner to a wide range of UK and European corporates, managed through its Chicago, Frankfurt, London, Milan and Paris offices.
Allstate is an established investor in private equity transactions around the world. Founded in the 1960s, Allstate’s private equity group currently manages more than $3 billion of invested capital in direct transactions and funds led by world-class sponsors and other partners. The team invests from offices in Chicago, London and Hong Kong using permanent capital provided by The Allstate Corporation.
About NVM Private Equity
NVM Private Equity is independently owned with over 30 years’ experience of investing in unquoted UK businesses. NVM is a generalist investor, managing £300 million of funds, and is differentiated by having executives living and working in regional business communities throughout the UK. NVM seeks investment opportunities of between £2 million and £12 million in UK businesses which have the right mix of growth potential and market vision. They may be looking to grow organically, acquire another business or secure a management buy-out. www.nvm.co.uk
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such
About Muckle LLP
Muckle LLP is a commercial law firm, based at Time Central, Newcastle upon Tyne.
Muckle has nearly 150 people in its team and 27 partners, with specialist expertise in commercial, corporate, property, employment, dispute resolution; and legal-specific sector expertise in registered providers, charities, energy, sports and education.
In September 2015, The Lawyer magazine included Muckle LLP amongst the UK’s best law firms in its ‘clients’ most-wanted’ survey. The Lawyer asked businesses a simple question: “Which external legal services provider do you most like to work with and why?” Muckle was consistently mentioned receiving praise as a ‘highly innovative and responsive firm.’
Experian CorpFin has ranked Muckle LLP was the most active North East dealmaker in 2015 and 2014. Information services provider, Experian, ranks Muckle LLP as the top dealmaker, having advised on more mergers and acquisitions of businesses valued above £500,000 in the region than any other law firm. The Experian results for 2015 demonstrate that, in addition to leading the deal volume league table, the total value of Muckle LLP deals exceeded the combined values of all our ranked competitors who are head quartered in the North East. Follow Muckle LLP on twitter @MuckleLLP and connect with Muckle LLP on LinkedIn
Barclays is an international financial services provider engaged in personal, corporate and investment banking, credit cards and wealth management with an extensive presence in Europe, the Americas, Africa and Asia. Barclays’ purpose is to help people achieve their ambitions – in the right way. With 325 years of history and expertise in banking, Barclays operates in over 50 countries and employs over 130,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide. For further information about Barclays, please visit our website www.barclays.com
About Yorkshire Bank
Yorkshire Bank was founded in 1859 in Halifax, West Yorkshire. Yorkshire Bank is a trading name of Clydesdale Bank plc, part of CYBG PLC.