Vision Capital tucks into Northern Foods portfolio

The portfolio deal specialist has bought four food businesses for a total of £160m in its second deal of the year

Vision Capital, a private equity firm specialising in portfolio deals, has exchanged contracts to buy four businesses from Northern Foods for £160 million ($306.6 million; €236.7 million).

The four companies are Fletchers Bakeries, a UK supplier of bakery products to retailers and foodservice; Smiths Flour Mills, a flour milling business; Park Cake Bakeries, a developer and producer of cakes and desserts in the UK; and Chilled Pastry, the overall market leader in chilled savoury pastry products in the UK.

Julian Mash, founding partner of Vision, said: “We have given Northern exactly what they wanted: transformation at a stroke. We could move at speed and they were happy with the price, all in one go without the risk of four separate transactions.”

The acquisition is Vision Capital’s second portfolio acquisition from a corporate seller this year and is the firm’s first entry into the own-label and branded food production sector.

It is also the second investment from Vision Capital Partners VI, the firm’s latest fund, and its parallel partnerships. In August 2006, Vision Capital acquired a portfolio of four companies from AEA Technology.

In May, Vision Capital announced a substantial increase in its investment capacity from its investors up to €1 billiion.

Vision Capital was advised by Lazard on the Northern Foods deal. Debt financing was arranged, structured and is fully under-written by WestLB.

Vision Capital focuses on acquiring European portfolios of direct private equity investments from private equity firms, corporates and other investors. These transactions enable sellers to realise value from an entire fund or portfolio in a short time frame, without having to sell their interests in the portfolio companies on an individual basis.

Mash said: “Vision Capital brings fresh capital and a new time horizon to its investee companies and works with their management teams to develop them over the medium term.”