Gresham exits Whitworths for £86 million

The UK mid-market firm has sold its stake in a UK healthfood supplier, making six times its investment.

Gresham Private Equity, the UK mid market private equity specialist, has sold health food supplier Whitworths to European Capital in a deal worth £86 million (€129 million; $163 million).

Over the life of the deal Gresham’s investors have made more than six times their investment in the £15 million buyout, led by Gresham’s Birmingham office in April 2001.

Whitworths has doubled its turnover since 2004, making three disposals and in 2005 acquiring competitor Sundora.

James Barbour-Smith, a Gresham director, said: “This investment has never been straightforward because to buy a business from the receiver, then add in a major acquisition and make three disposals is very challenging.”

In its third acquisition in as many months, European Capital fought off competition from ABN AMRO Capital, Barclays Private Equity, Capvest and HgCapital, a source told PrivateEquityOnline. 

European Capital’s investment takes the form of senior facilities, subordinated debt and equity.  The company is also providing a revolving credit facility.  Will Carter, who will be the chief executive of Whitworths under European Capital’s ownership, members of Whitworths’ current management team and other private investors are also investing in the company’s equity.

“This is European Capital’s fifth one-stop-buyout and the third to have been completed by the London office,” said Ira Wagner, president of European Capital Financial Services, the sub-investment manager of European Capital.  “Our access to capital and ability to conduct rapid in-house due diligence enabled us to quickly and solely complete this buyout.” 

This month the buyout and mezzanine fund also acquired paint company Farrow and Ball and weighing equipment manufacturer Avery Weigh-Tronix.

European Capital has invested approximately €1.1 billion ($1.4 billion) in the last twelve months, €1 billion year to date and €224 million quarter to date.

Founded in 1886, Whitworths supplies dried fruits, nuts and seeds within the culinary ingredients and snacking sector.