Midland private equity provider LDC and a team of advisers from the region were behind the £17 million management buy-out of Cranswick Pet and Aquatics.
The deal sees the East Yorkshire-based firm, which consists of wild bird food manufacturer and distributor Cranswick Pet Products (CPP) and the Tropical Marine Centre (TMC), bought from listed food producer Cranswick.
The management buy-out team was led by the chief executive of Cranswick Pet and Aquatics Derek Black together with Paul West, the managing director of TMC.
CPP is the UK’s largest manufacturer and supplier of wild bird food and accessory products with a history since 1789 and TMC is the UK’s largest supplier of tropical marine fish and associated aquatic, accessories and fish food.
CPP has enjoyed strong growth over recent years and its portfolio of brands include Nature’s Feast, Bucktons and Cheeky Boy.
John Garner, LDC investment director, worked on the deal with support from Andy Lyndon, Paul Figgins and Matthew Norrington from the LDC Midlands team. Mr Garner said the private equity provider had worked with local advisers on the deal and that the transaction was “Midland advised through and through”.
He said: “Essentially, we are backing a first-rate management team who have built a market-leading business which, we believe, is not only resilient to the challenging economy but is also well placed for future growth. We are looking at investments which we feel are resilient to the current downturn. Pets are not really a discretionary spend - people still continue to feed them and fish hobbyists are still interested in fish. We feel it’s a robust business with a lot of good characteristics.
“It’s an indication of the strength of the business that we were able to raise a significant amount of bank debt and equity finance in the market. We want to invest at the current time. This is a good thing to show we are open for business and looking to invest.”
Bishopsgate Corporate Finance, based in Lincolnshire, initiated the transaction and acted as lead advisers on the deal while Lloyds TSB Corporate Markets’ Midland acquisition finance team, led by Paul Whitehouse, provided senior debt and working capital facilities.
LDC was advised by Freeth Cartwright LLP in Nottingham while management were advised by Brown Jacobson, also based in Nottingham.
Paul Whitehouse, director, Lloyds TSB Corporate Markets acquisition finance, said: “Cranswick Pet & Aquatics has a strong trading history and the deal with LDC will give the business the funding and strategic input needed to take it on to its next phase of growth. This transaction highlights that both debt and equity funding is available in the current market to support talented management teams who have built strong businesses with the potential for significant future growth.”
Bishopsgate corporate finance director Tom Spencer said: “This is a real success story in the current market and I hope it gives heart to the UK corporate finance community - this was a traditional buy-out backed by traditional private equity and traditional debt.”
The deal will provide the capital required to help support the continuing growth of CPP and TMC.