email: info@kingswood.org.uk

Community Foods Limited

We advised the Directors on the management but-out of their employer’s business and arranged £11.1m to finance the transaction and to enable it to expand.

Overview

Kingswood advised and supported the management team of Community Foods on the acquisition from the parent company, Community Foods Group Limited, which was formerly known as Milk Marque.

The Micross team was led by Martin Rome (Managing Director) and Clive Warner (Finance Director), together with David Lewis (Commercial Director), Joe Erskine (Ingredients Director) and Vince Andrew (Operations Director).

Sector: Health Foods / Importing
Deal Type: Management buy-out
Deal Value: £11.1m
Website: www.communityfoods.co.uk

Our Involvement

  • Advised the Directors on the management buy-out
  • Arranged a new £11.1m working capital facility from Close Brothers Invoice Finance
  • On-going operational support and strategic advice to help grow the business

We have been actively seeking to acquire the business through a management buy-out for many months. The acquisition of Community Foods is a positive and significant step in our mission to provide improved value and benefits for our customers." "The combination of objectiveness and determination that has been displayed by Jonathan Massing of Kingswood has enabled Community Foods to navigate its way through an extremely difficult period. The resulting conclusion was impossible to imagine just a year ago. We look forward to continuing our relationship with Jonathan and his colleagues at Kingswood in the years to come.

Martin Rome | Managing director, Community Foods Limited

This was a particularly difficult and complex transaction involving the acquisition of a business from a group which was heavily indebted to an under-funded pension fund; delicate negotiations with the Trustees of the Milk Pension Fund; and a full refinancing of working capital facilities through Close Brothers Invoice Finance to enable the repayment of indebtedness to both Lloyds Bank and Barclays Bank." "After some four months of protracted negotiations we are delighted to have advised the management team on securing the future for Community Foods and in the process achieving a management buy-out to secure their own future.

Jonathan Massing | Managing Partner, Kingswood

Background Information

Community Foods has been in business for more than 40 years and in that time has seen many changes, in particular the development of the Health Food trade and the general acceptance of a healthy diet. The company has been at the forefront of many of these developments and now looks forward to continuing on that exciting journey.

The company is very fortunate to have decade’s worth of experience within its ranks which has enabled it to navigate its way through a very challenging period. A number of key projects are currently underway which will significantly enhance the company’s capabilities for the benefit of its clients and provide a strong platform for future success.

Community Foods was acquired by the old Milk Marketing Board (Milk Marque) and in 2007, the recession and an increasing pressure on margins, resulted in the company falling into losses. The management team is a blend of old and new, with 4 key executives having come from Whitworths (largest supplier of home baking products into the major supermarkets). Martin Rome and Clive Warner joined Community Foods in January 2010 and, together with the management team, have made a number of significant changes in order to improve internal controls and profitability.

The business operates in 3 key channels: wholesale; retail (including Sainsbury’s and Tesco); and ingredients supply; supported by a manufacturing division.

Following completion of the management buy-out, the management team will set about implementing their strategic investment plan which will include substantial capital investment and the possibility of acquisitions.