Kitwave Wholesale Group, one of the largest UK-based grocery wholesalers, has completed a reported £20M refinancing deal, funded by lead investor Pricoa Capital Group and minority co-investor Allstate, in order to continue pursuing its acquisition strategy. The transaction also provided an exit for NVM Private Equity, which invested in the business in 2011.

Kitwave, founded by CEO Paul Young in 1988, has a reputation for excellence in service quality, product availability and customer relationships. The company, which sells tobacco, alcohol, confectionery and soft drinks, is based in North Shields and also operates from warehouses in Telford, North Shields, Middlesbrough, Carlisle, Bradford and Bolton. Aside from its nationwide delivery capability, the group has expanded to offer frozen, ambient and own label products to the independent retail, vending and food service sectors.

In 2014 Kitwave broke into The Sunday Times ‘Top Track 250’ and was invited to join the London Stock Exchange ‘Elite’ scheme for fast growing companies. More recently the Group has entered the prestigious Grocer’s ‘Big 30’ ranking for the first time as the 15th largest UK based wholesaler.

Kitwave has transformed itself from being a regional UK confectionery business to a national wholesaler through 11 acquisitions since 2006. Since NVM’s investment the group has acquired Anderson Wholesale, Automatic Retailing, Teatime Tasties, Eden Farm, Squirrels UK and most recently, Hulleys Frozen Foods, in July 2015. The sale represents a gross money multiple of 3.0 times on NVM’s original investment, says the company.

“This deal marks the start of the next chapter of our growth story, which sees revenues on track to reach in excess of £260m in the current financial year,” said Paul Young, CEO of Kitwave. “During the last five years, NVM has been a major support and the capital and faith in our strategic vision has continuously helped to ensure we have developed an attractive platform to continue to grow.”

“We are delighted to have the opportunity to finance Kitwave on this recapitalisation with Allstate as a co-investment partner,” said Donald Campbell, senior vice president, Pricoa Capital Group.

“Kitwave has been a very successful investment for NVM and its funds and is now well positioned for its next phase of growth,” said Mauro Biagioni of NVM Private Equity.

Rod Wilkinson of KPMG, who leads the firm’s Corporate Finance practice in Newcastle, said: “This funding deal gives NVM Private Equity a strong exit, delivers Kitwave with the platform to continue its growth strategy and offers Pricoa and Allstate an investment in a business with a strong track record and a pipeline of planned acquisitions.”

Newcastle advisors KPMG Corporate finance and law firm Muckle LLP advised Kitwave’s shareholders on the deal. Morgan Lewis advised Pricoa and allstae.

The deal also sees Kitwave maintain its longstanding relationship with Barclays, which has supported the business from inception, in conjunction with a new association with Yorkshire Bank.

“Barclays has been the banking partner of Kitwave since the company was established in 1987 and this transaction is both a significant and pivotal milestone in Kitwave’s history as it paves the way for further expansion and growth. This is a highly professional and progressive brand that is thriving; the management’s ambitious growth plans is testament to their success and we’re delighted that we’ve been able to support with funding for their further development,” said Barclays Relationship Director, David Collins.

Pricoa Capital Group has been a leading provider of private capital to companies for more than 75 years, investing private debt and equity from its local office network in North America and Europe. Pricoa manages a portfolio of more than US$73 billion (as of 30/12/15) investing up to US$12 billion in private capital annually in companies worldwide. Pricoa has established itself as a premier capital partner to a wide range of UK and European corporates, managed through its Chicago, Frankfurt, London, Milan and Paris offices.

Allstate is an established investor in private equity transactions around the world. Founded in the 1960s, Allstate’s private equity group currently manages more than $3 billion of invested capital in direct transactions and funds led by world-class sponsors and other partners. The team invests from offices in Chicago, London and Hong Kong using permanent capital provided by The Allstate Corporation.

NVM Private Equity is independently owned with over 30 years’ experience of investing in unquoted UK businesses. NVM is a generalist investor, managing over £270 million of funds, and is differentiated by having executives living and working in regional business communities throughout the UK. NVM seeks investment opportunities of between £2 million and £12 million in UK businesses which have the right mix of growth potential and market vision, seeking to grow organically, by acquiring another business or through a management buy-out. The company has offices in Newcastle, Reading and Manchester, in the UK.



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