Karro Food Group, the pork processor owner by private equity investor CapVest, has agreed terms to buy UK seafood business Young’s.
The agreement brings to an end a process kicked off more than a year ago when Young’s was put up for sale by owners Lion Capital, Bain Capital and HPS Investment Partners in April 2018.
CapVest was understood to be close to agreeing terms late last year after emerging as the preferred bidder, but the acquisition stalled over the precise terms amid speculation the deal had collapsed.
Now Young’s will be integrated into Karro, which Capvest bought for £180m in March 2017, to create a new UK-based multi-protein food group.
The new group will have sales of circa £1.2bn and employ over 5,000 people across the UK and Ireland.
Karro and Young’s will continue to operate as separate businesses within the new enlarged group.
Di Walker, current executive chair of Karro, has been appointed CEO of the wider group.
She commented: “We are very excited about the opportunity to create an ambitious multi-protein food business of considerable scale. Young’s and Karro are highly complementary businesses and the combined platform will have strong market positions in two important protein categories that are experiencing consistent long-term growth. Today’s agreement will provide both businesses with the opportunity to further develop and broaden our relationships with our key partners.”
Bill Showalter, CEO of Young’s, added: “We are delighted to be moving forward with Karro and CapVest and we believe this move will be positive for the fish and seafood industry as a whole.
“With CapVest’s existing understanding of our industry, and as part of a multi-protein food group, we will have the opportunity to inspire more consumers to love fish through our fresh, frozen, own-label and branded products. The transaction will build an even stronger foundation from which we can drive growth, providing exceptional quality fish and stand out innovation to countries around the world.”
Jason Rodrigues, Partner, CapVest, commented: “CapVest believe strongly that the combination of Young’s and Karro will create a differentiated and attractive multi-protein platform. We look forward to working closely with management to accelerate investment and strengthen the competitive position of each business, whilst also pursuing other acquisition-led growth opportunities.”
Terms of the deal were undisclosed.
It was previously thought Young’s former owners had put a £200m price tag on the business, though speculation at the time of apparent initial agreement with CapVest suggested the final price could be under £150m.
CapVest previously owned Young’s and sold it to Lion Capital back in 2008.
Seafood industry players such as Princes owner Mitsubishi, Cooke Aquaculture, Thai Union, Marine Harvest and Samherji-owned UK Fisheries were all linked with Young’s during the lengthy sales process.
Young’s most recently filed accounts for the year to 30 September 2017 showed a swing to a large pre-tax loss of £39.3m after a huge writedown owing to the loss of a Sainsbury’s own label fish contract. However, sales rose to £523.3m for the 12-month period, from £496.5m.
Recently filed accounts for Karro showed losses continued to mount under CapVest’s ownership, with pre-tax losses for the year to 29 December 2018 rose to £9.2m, compared to a £4.8m loss in the shorter 35-week period to the end of December 2017.
Sales rose to £638.2m from £442.5m last year, though this represented a 2.9% decline on a pro-rata basis.