Fresh fruit and veg top products

Freshcut supplies prepared fruit, veg and carbohydrates to the likes of Greencore, Bakkavor and Samworth Brothers

Freshcut Foods is close to securing new investment as its current PE owner lines up an exit.

Perwyn hired advisors at US-based investment bank Stephens to explore options for the fresh ingredients supplier earlier this year.

The auction is now in its final stages with four or five private equity firms vying to take over the majority stake in a deal worth upwards of £55m, according to City sources.

Final bids are expected on 21 December, with mid-market firms LDC, Limerston Capital and True Capital all understood to be involved.

Perwyn picked up a majority stake in Freshcut in 2018, backing a management team led by David Bondi, with plans to support future growth prospects.

Freshcut supplies a range of added-value vegetables, fruits and carbohydrates, including pasta and pizza toppings, from two facilities in Nottinghamshire to food manufacturers and foodservice operators in the UK.

Its customers include the likes of Greencore, Bakkavor and Samworth Brothers, as well as pub groups.

Established in 2002, the company, which employs about 250 staff, registered rapid growth until lockdown restrictions led to the shutdown of the hospitality industry and a downturn in demand for food-to-go in 2020.

Accounts for the year ended 31 July 2021 at Companies House, revealed a reduction in sales of 56% from a run rate of £31m per year to £13.5m. However, revenues for the year remained flat at £25.5m as the company sought out new fast-growing channels.

It is now operating at similar levels to before the pandemic.

One dealmaker source said the business had recovered well and was growing rapidly once again.

“It’s a solid business with good margins and it has recovered well from the pandemic as the out-of-home market opened back up,” the source added.

“It ticks all the boxes from a private equity perspective.”

Perwyn, Freshcut and Stephens all declined to comment.