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Kitwave Group has snapped up fresh produce wholesaler WestCountry Food Holdings for £29m to incorporate into the company’s foodservice division.
The deal has been funded from the group’s current banking facilities and a new three-year revolving credit facility provided by existing banking partners.
Established in 1856, WestCountry is a wholesaler of local, regional and imported fresh produce in the South West of England to the foodservice sector.
Kitwave said the business had developed “an unrivalled network of dedicated, high-quality local growers of seasonal fresh produce”, as well as direct supply links with national and international fresh produce markets.
WestCountry reported turnover of £29.7m and pre-tax profits of £3.9m for the year ended 1 January 2022.
Kitwave paid a multiple, excluding cash and the value of the freehold, of about 4.4 times annual run rate EBITDA.
The board added that it believed the acquisition would be immediately earnings enhancing.
Kitwave’s foodservice division currently comprises the trading operations of HB Clark & Co, David Miller Frozen Foods and MJ Baker Foodservice.
Kitwave CEO Paul Young said the acquisition would enable the group to expand its product range to include high-quality fresh produce and complemented the existing foodservice offering in the South West, following the MJ Baker deal earlier in 2022.
“We are delighted to welcome the WestCountry team to Kitwave and look forward to successfully integrating the business into the group’s foodservice division and further extending our nationwide reach,” he added.
“The group continues to trade well and despite wider macroeconomic pressures, the directors believe the outlook remains positive. We look forward to updating shareholders further on our progress.”
Shares in Kitwave jumped 3.5% to 177p this morning on the back of the news.
Morning update
Premium mixer brand Fever-Tree Drinks has appointed Domenic De Lorenzo as its new non-executive chairman.
De Lorenzo has been on the board of the group as a non-executive director since May 2018 and will take up the new role following the company’s AGM in May 2023.
He will work closely with Bill Ronald during a handover period before assuming the role of chairman.
Ronald was appointed to the board as chairman in June 2013 ahead of the company’s IPO in November 2014. He informed the board in May this year of his intention to retire from his role and step down at the 2023 AGM.
De Lorenzo is a qualified chartered accountant and has experience across the consumer goods and beverages sectors, having previously spent more than 20 years at SABMiller, the former FTSE 100 brewer, where he focused on strategy and corporate finance before becoming chief financial officer and an executive board director.
Ronald said: “Following a comprehensive recruitment process led by Coline McConville as chair of the nomination committee, I am delighted to welcome Domenic as my successor.
“Domenic brings exceptional leadership and commercial skills, with a clear focus on performance and a strong strategy skill set. Having worked with him in a board capacity since 2018, I can attest to his strength of judgement and proven governance reputation and focus, as well as his personal leadership skills.”
De Lorenzo added: “It is a privilege to take on the role of chair of Fever-Tree, a company that I am passionate about.
“I look forward to continuing to work with the board as well as the executive team and supporting the business to deliver on its exceptional global potential.”
Fever-Tree will make an announcement regarding De Lorenzo’s successor as audit committee chairman in due course.
The FTSE 100 started the week in the red, falling 0.3% to 7,453.98 as markets opened this morning.
Early risers so far include Nichols, up 2.4% to 1,113.2p, Marston’s, up 1.7% to 40.1p, Haleon, up 1.1% to 318p, and Kerry Group, up 0.7% to €86.38.
Fallers so far include Ocado, down 4.2% to 657.6p, HelloFresh, down 3.1% to €23.90, and Marks & Spencer, down 2.6% to 119.9p.
This week in the City
The markets are looking much quieter this week as the City prepares for the Christmas holidays.
However, tomorrow brings the latest monthly grocery sales figures from Nielsen for the four weeks to 3 December.
There is also the latest unemployment figures from the ONS tomorrow and UK inflation data on Wednesday.
Finally, the week draws to an end with the closely watched GfK consumer confidence survey and the ONS retail sales figures for November.
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