Langholm breakfast investment pays off

The Unilever-backed fund has made four times its money on its investment in fast-growing Dorset Cereals where employee numbers have doubled.

Langholm Capital, a mid-market consumer business specialist, has sold Dorset Cereals to Wellness Foods for four times its original investment into the branded muesli producer.

It acquired the business in April 2005. No financial details were disclosed.

Since then the brand has been re-launched both in the UK and overseas and extended into other cereal categories: porridge, flakes and cereal bars. In 2007, total branded sales nearly doubled, with Dorset Cereals becoming the number two muesli brand in the UK, as well as the fastest growing mainstream breakfast cereals company overall.

Langholm Capital invested in the business in both the factory and in brand development, with the number of employees more than doubling to more than 100.

Dorset Cereal’s senior management team of Peter Farquhar, Nigel Horsman and Patrick Horton will remain with the business and will continue to be significant shareholders in the business with Wellness Foods supportive of management’s plans.

Bert Wiegman, partner of Langholm Capital, said in a statement: “The success demonstrates the benefits of Langholm Capital’s focussed approach of investing in high growth consumer facing companies and supporting management teams who can produce above average returns.”

Langholm Capital was advised on the transaction by McQueen and Travers Smith.

Langholm Capital is currently investing from a fund of €242 million, with Unilever, a leading FMCG company and Rabobank, the AAA-rated food and agri specialist bank, as its principal investors. It focusses on businesses that are strategically positioned to capitalise on opportunities arising from emerging consumer and demographic trends, as well as fundamental changes currently taking place in consumer lifestyles and priorities.