Food service business acquired at more than 10x profits
Thu, 28 Mar 2024 | BUSINESS SALE
Total Foodservice, a wholesale catering supplies business, has been acquired by listed wholesaler Kitwave for £21 million. The consideration represents a 10.5x multiple of the company pre-tax profits of £2 million for the year ending April 30 2023, generated on turnover of £25.4 million.
Total Foodservice, which has depots in Clitheroe and Huddersfield, provides wholesale catering supplies from approximately 4,000 product lines, including frozen, chilled and ambient food, as well as non-food and cleaning products.
The firm’s customers include licensed trade and restaurants, schools, coffee shops and sandwich bars across the North of England. In its 2023 accounts, the company’s net assets were valued at £8.5 million.
Following the acquisition, the company will be integrated into Kitwave’s existing foodservice division, which comprises the trading operations of David Miller Frozen Foods Limited, Westcountry Food Holdings Limited, M. J. Baker Foodservice Limited and H.B. Clark & Co. (Successors) Limited.
Kitwave’s board believes that the acquisition will be immediately earnings enhancing, once costs relating to the transaction have been added back.
Kitwave CEO Ben Maxted said that Total Foodservice was “a one-stop shop for wholesale commercial catering supplies” and that the deal would enable Kitwave "to further expand our product range offering across the North of England and in particular Yorkshire and the North West, complementing our existing foodservice offering.”
He continued: "Total Foodservice is a well-established business in the catering industry and we look forward to welcoming its team to Kitwave and integrating the business into our Foodservice division.”
Maxted added that the acquisition was in line with Kitwave’s ongoing growth strategy and that the company would “continue to seek to identify further opportunities in the UK's highly fragmented wholesale market to deliver further value to the group and its shareholders."
In spite of ongoing economic turbulence, M&A remains a key strategic priority for many UK businesses
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