Acquisition of WestCountry Food Holdings LimitedSource: RNS
12 December 2022
Kitwave Group plc
("Kitwave", the "Group" or the "Company")
Acquisition of WestCountry Food Holdings Limited
Kitwave Group plc (AIM: KITW), the delivered wholesale business, is pleased to announce that the Group has acquired the entire issued share capital of WestCountry Food Holdings Limited ("WestCountry"), a specialist fresh produce wholesaler to the foodservice sector (the "Acquisition"). The total gross consideration payable for the Acquisition is £29.0 million in cash and has been funded from the Group's current banking facilities and a new three-year revolving credit facility provided by its existing banking partners.
Established in 1856, 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.
WestCountry reported audited turnover of £29.7 million and profit before tax of £3.9 million for the financial year ended 1 January 2022. As at 1 January 2022, WestCountry had net assets of £11.0 million. The acquired balance sheet includes c. £7.8 million of cash and a freehold property with a book value of c. £1.2 million. The multiple being paid for the Acquisition, excluding cash and the value of the freehold, is c. 4.4 times annual run rate EBITDA. The Board believes that the Acquisition will be immediately earnings enhancing.
The Acquisition will be incorporated into Kitwave's existing Foodservice division which currently comprises the trading operations of H.B. Clark & Co. (Successors) Limited, David Miller Frozen Foods Limited and M. J. Baker Foodservice Limited.
Commenting on the Acquisition, 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.
"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.
"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."
For further information please contact:
Kitwave Group plc
Paul Young, Chief Executive Officer
David Brind, Chief Financial Officer
Tel: +44 (0) 191 259 2277
Canaccord Genuity Limited
Tel: +44 (0) 20 7523 8150
Yellow Jersey PR
Tel: +44 (0) 20 3004 9512
Founded in 1987, following the acquisition of a single-site confectionery wholesale business based in North Shields, United Kingdom, Kitwave is a delivered wholesale business, specialising in selling and delivering impulse products, frozen and chilled foods, alcohol, groceries and tobacco to approximately 39,000, mainly independent, customers.
With a network of 27 depots, Kitwave is able to support delivery throughout the UK to a diverse customer base, which includes independent convenience retailers, leisure outlets, vending machine operators, foodservice providers and other wholesalers, as well as leading national retailers.
The Group's growth to date has been achieved both organically and through a strategy of acquiring smaller, predominantly family-owned, complementary businesses in the fragmented UK grocery and foodservice wholesale market.
Kitwave Group plc (AIM: KITW) was admitted to trading on AIM of the London Stock Exchange on 24 May 2021.
For further information, please visit www.kitwave.co.uk.