Newcastle-based delivered wholesale specialist Kitwave Group has acquired the entire issued share capital of WestCountry Food Holdings Limited in a £29m cash deal.
WestCountry is a leading wholesaler of local, regional and imported fresh produce in the South West of England. The WestCountry business has 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.
It reported audited turnover of £29.7 million and profit before tax of £3.9 million for the financial year to January 1, 2022. As of the same date, WestCountry had net assets of £11.0 million including £7.8 million of cash and a freehold property with a book value of £1.2 million. The multiple paid for the acquisition, excluding cash and the value of the freehold, is around 4.4 times annual run rate EBITDA. The board believes that the Acquisition will be immediately earnings enhancing.
Paul Young, chief executive officer of Kitwave, said: “The acquisition of WestCountry enables us to expand our product range to include high-quality fresh produce and complements our existing foodservice offering in the South West, following the acquisition of M. J. Baker earlier in 2022.
“The Group continues to trade well and despite wider macroeconomic pressures, the directors believe the outlook remains positive.”
The acquisition will be incorporated into Kitwave’s existing foodservice division which currently comprises the trading operations of brands H.B. Clark & Co. (Successors) Limited, David Miller Frozen Foods Limited and M. J. Baker Foodservice Limited. It has been funded from the group’s current banking facilities and a new three-year revolving credit facility provided by existing banking partners.
Kitwafe was Founded in 1987, following the acquisition of a single-site confectionery wholesale business based in North Shields. It is now a delivered wholesale business operating sites and delivery hubs across the UK and specialising in selling and delivering impulse products, frozen and chilled foods, alcohol, groceries and tobacco to approximately 39,000, mainly independent, customers.