REG - Kitwave Group PLC - Acquisition of WestCountry Food Holdings Limited

KitwaveAnnouncement

12/12/2022 07:00

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RNS Number : 2964J  Kitwave Group PLC  12 December 2022

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."

 

- Ends-

 

For further information please contact:

 Kitwave Group plc                                    Tel: +44 (0) 191 259 2277

 Paul Young, Chief Executive Officer

 David Brind, Chief Financial Officer

 www.kitwave.co.uk (http://www.kitwave.co.uk/)
 Canaccord Genuity Limited                            Tel: +44 (0) 20 7523 8150

(Nominated Adviser and Sole Broker)

 Bobbie Hilliam

 Yellow Jersey PR                                     Tel: +44 (0) 20 3004 9512

(Financial media and PR)

 Sarah Hollins

 Henry Wilkinson

 James Lingfield

 

Company Overview

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
(http://www.kitwave.co.uk/) .

 

 

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