One of Wales' best known companies was yesterday acquired in a private equity-backed management buyout worth £20m. Peter's Food Service – best known for its pie and pastry products – has been sold by the Griffiths family, who bought the company 10 years ago.
The company, headquartered in Bedwas near Caerphilly, was bought by John Griffiths, who came out of retirement to rescue it from hotels and brewery group Grand Metropolitan.
Established in 1970, Peter's now has a turnover of £53m and employs 640 people across its manufacturing and distribution divisions.
John Griffiths will retire, along with his daughter Judith Griffiths and non-executive director Dr Godfrey Ainsworth of Gambit Corporate Finance.
Mr Griffiths' son Justin – who was managing director – will take on the role of food service director, with David Peek continuing as finance director.
They will be joined by new managing director Mike Grimwood, a former executive of food group Northern Foods.
The team, which has more than 40 years' combined experience in the savoury pastry sector, will take significant equity stakes in the business alongside NBGI Private Equity, which has acquired majority ownership. Peter's long-standing bankers RBS funded the debt.
Companies House records show the Griffiths family will have made about £16.75m and Mr Peek £1.25m. Mr Ainsworth, who also invested in the original acquisition, pockets £2m.
The £20m return is on an original investment of less than £200,000. Records also show that the sellers have had substantial dividends from the investment over the past 10 years and benefited from share buy-backs.
It is understood that three other managers who invested at the time of the original purchase from Grant Met have all sold their shares back to the company in the past 10 years.
John Griffiths said, "I am finally retiring from a business I have served for 35 years. I leave it in the safe hands of my son Justin, and David and those of the new member of the management team, Mike Grimwood.
"Mike has considerable experience in and knowledge of our sector; he will inherit diligent and hard-working employees and management inthe factories, depots and on the road.
"Together with the financial muscle of NBGI, I know they will move from strength to strength. I wish them every continued success."
Peter's products are sold in thousands of outlets across England and Wales, ranging from the major national supermarkets to football and rugby grounds and fish-and-chip shops.
The food service division has developed from a van sales operation into a service-oriented supplier of chilled and frozen foods with 10 sites including London, Cardiff and Birmingham.
The manufacturing division produces more than 100 million pastry products each year at the Bedwas plant.
Speaking on behalf of the management team, Mr Grimwood said, "Peter's is a tremendous business with a great commitment to quality and service to its customers.
"It has a high-quality management team and workforce that will allow the company to grow its Peter's brand, retailer brand and food service business rapidly.
"Peter's Food Service is well positioned to expand its client base further. We have been very impressed with NBGI and RBS, and strongly believe that with their backing we can further capitalise on the prevailing market opportunities and in turn provide benefits to our clients, employees and suppliers.
"The great thing about Peter's is that it's in cracking shape. It's a solid company with a great workforce and we're all really excited about the future.
"We want 2008 to be about growth and stability – that's why we're planning to launch an exciting new range of sausages and a very special steak-and-ale pie in collaboration with Fuller's brewery."
Corporate finance partner Simon Bursell of Dains, a Midlands-based chartered accountancy and business advice firm, acted for the management team, while Nabarro led the legal advice for the buy-out with Geldards advising NBGI and Eversheds advising RBS.
The vendors were advised by Dr Ainsworth and Alan Whitely, of M&A Solicitors, both of whom acted 10 years ago in the original acquisition from Grand Met.
Dr Ainsworth said, "During the past 10 years, Alan and I have advised John and Peter's on more than 10 deals including major acquisitions and disposals, and it gives us great personal pleasure to advise him in this transaction to give effect to his well-deserved retirement."
Mr Bursell said, "Dains has been delighted to work with such a high-quality management team. They deserve the opportunity to take Peter's Food Service on to the next stage of its development.
"Under Mike Grimwood's leadership the business is well placed to continue providing its customers with great value products and a first-class service."
Richard Morley, director of NBGI Private Equity, who has joined the board of Peter's, said, "NBGI Private Equity is delighted to be backing the buyout of Peter's, the first investment in our second £100m fund.
"Peter's is a national brand built on a strong commitment by the whole company to combine the delivery of top quality pastry products to the UK consumer with first-class customer service.
"We are confident that the strength of the product offering combined with a first-class management team will push the company to the next stage of its development and continue the success NBGI Private Equity has had in backing high growth companies since 2000."
Nick Evans, director of corporate structured finance for RBS in Wales, said, "The company has been incredibly successful in recent years and this has been a great opportunity to work closely with the management team to put a bespoke funding solution in place."
