Muckle cooks up £71m deal for Kitwave

We have advised leading wholesaler Kitwave in its acquisition of Creed Foodservice, one of the UK’s major foodservice providers, in a deal worth up to £71m.

Kitwave, which is based in North Tyneside but has operations all over the UK, has purchased the Cheltenham-headquartered Creed for an initial £61m, with up to an additional £10m over the next two years depending on performance targets being achieved.

This acquisition makes Creed the core component of Kitwave’s Foodservice division, which also includes the trading operations of David Miller Frozen Foods, Total Foodservice, M.J. Baker Foodservice, and Westcountry Food Holdings. 

The acquisition was funded by way of a successful capital raising (placing and retail offer) and additional bank funding from Kitwave Group’s lenders. The acquisition exchanged on Tuesday 24 September with completion, which was conditional upon the capital raise and drawdown of bank funding, taking place on Friday 27 September.

The deal team at Muckle comprised Sara Worsick who led on the acquisition, Sarah Forster who led the placing and Louise Duffy who led on the bank funding. Anthony Evans supported on the acquisition.

National growth

Creed recently reported a strong financial year, with revenue of £130.2m and operating profits of £8.3m.

The acquisition grows Kitwave’s foodservice customer base to over 10.5m across various sectors and contributes to an annual revenue of £275m.

This deal is the latest in a string of successful acquisitions for Kitwave, which have bolstered the company’s diversification and subsequent national growth over the last decade.

Most recently, this included the acquisition of fellow Northern wholesaler Total Foodservice in March this year and drinks distributor Wilds of Oldman last year.

Ben Maxted, chief executive officer of Kitwave, commented: "Creed has an exceptional heritage and is one of the UK's leading foodservice wholesalers, so we are delighted to have reached this agreement which will extend our Foodservice division.

"Strategically, Creed will significantly expand our geographical presence, bridging our operations in the North and South and creating a fully integrated national delivery network.

"In line with our buy and build strategy, Creed is also expected to significantly enhance the Group's earnings along with providing material buying, operational and financial​ synergies.

"We are looking forward to working with Creed's dedicated and experienced team and excited to see our Foodservice division continue to go from strength to strength."

Recipe for success

Sara Worsick, associate in Muckle’s corporate finance team, was lead adviser on the transaction alongside Sarah Forster, who led the placing and Louise Duffy, who led the refinance.

Sara said: "This deal solidifies Kitwave’s position as a top national wholesaler and creates further organic growth opportunities. Kitwave's continued success is fantastic for our region, and we are looking forward to seeing this continue."

David Brind, chief financial officer at Kitwave, said: "Muckle has been our trusted adviser for many years, with the team’s expertise and dedication being instrumental in supporting us through numerous successful transactions.

"Our acquisition of Creed is no different; Sara and the team demonstrated exceptional knowledge and tenacity at all times, and worked diligently to ensure the best outcome for all on a restricted timetable."

To find out more about Kitwave, visit www.kitwave.co.uk.

For more information on this deal, please contact Sara using 0191 211 7945 or [email protected].