NBGI makes four times return on sandwich sale(2)

NBGI Private Equity has benefited from Duke Street’s attempts to consolidate the chilled foods sector, making a sizeable return on the £22 million sale of Brambles Foods to Food Partners.

UK mid-market firm NBGI Private Equity has generated a tidy return by selling sandwich maker Brambles Foods to Food Partners, a rival UK business owned by buyout group Duke Street Capital.

NBGI will make a return of 4.3 times its initial investment on the £22 million (€32.5 million; $43.5 million) sale, which equates to an internal rate of return of 52 percent. It bought the firm in July 2003 and has since tripled turnover from £8 million to £25 million. This was partly due to the bolt-on acquisition of Harry Mason, another sandwich maker, in 2005.

Brambles Foods

Brambles makes pre-packed sandwiches for schools, hospitals and contract caterers, and in the latter category particularly it has been operating as a direct competitor to Food Partners. The business has factories in Middlesbrough and North London but distributes nationally.

NBGI director Richard Morley said the investment had been a real success story for his firm. “It has been very rewarding to support an excellent management team taking a relatively small business at the time of the original buy-out in 2003 and developing it into a major player in its sector,” he said.

Duke Street is buying the business through Food Partners, the pre-packed sandwich business it bought in April last year. Food Partners became the buyout firm’s third addition to Adelie Food Holdings, a group of companies that make chilled ready-to-eat foods, following deals for Buckingham Foods and Thomas Food Group a month earlier. Duke Street, which invested £100 million to buy and combine the three companies, has since added Superior Food Group, in February this year.

Bank of Scotland and Glitnir Bank provided debt financing for the deal.

Last month Duke Street also bought UK snack-maker Burton’s Foods from HM Capital, in a deal thought to be worth around £200 million.