Addo Food Group, formerly known as Pork Farms, has been the target of detailed takeover talks with private equity firms as owner Vision Capital explores options, including refinancing, The Grocer can reveal.
Vision was keen to make a return on its investment, which included buying Kerry Foods’ chilled savoury pastry business in 2014 and more than £30m on upgrading facilities, senior City sources said.
European mid-market firm CapVest came close to a deal earlier in the summer as part of a larger pork roll-up, with supplier Karro Food Group also in its sights.
However, the deal was dependent on buying both businesses and the investment group walked away when it was unable to get to the price wanted by Karro owner Endless, The Grocer understands.
Talks are now ongoing with a number of PE firms, including Sun European Partners and an overseas trade buyer.
“It’s a tough deal to get done,” a source said. “Although Addo is profitable there are question marks about how sustainable that is as pig prices rise and other cost pressures bite. The private equity interest is still there but still some way off a deal being done.”
Vision, which acquired the pork pie producer in late 2006 from Northern Foods, has grown sales from about £120m to close to £160m in 2014/15.
Profitability has also received a £7m boost this year as Addo improved the performance of the chilled business bought from Kerry, with EBITDA thought to now be at £17m.
All parties declined to comment.
No comments yet