LDC generates 2.6x return on sale of Waterfall to Elior

LDC has exited its investment in Waterfall Catering Group, the contract catering business behind Caterplus and Taylor Shaw, to Paris-based multinational Elior Group SA.

LDC, originally backed the £20m secondary buyout of Waterfall in December 2014 in a deal that supported the growth ambitions of the business’ management team, led by CEO Jim Lovett, Finance Director Gabrielle Higham and Chairman Vince Pearson.

The transaction, which was led by Investment Director Richard Ibbett and Director and Co-head of LDC in the North West Johnny Bell, generated a 2.6x money multiple and IRR of 81 per cent for LDC.

Since the investment, LDC has supported the management team in executing their organic growth strategy for the Warrington-headquartered company, which focused on strengthening margins, as well as improving customer proposition and service delivery in its core markets of care and education.  This has driven growth in revenues from £50m to over £70m with headcount increasing from 3,000 to more than 3,500 employees during the last 19 months.

The deal sees Waterfall Catering Group join one of the world’s largest operators in the contracted food industry in Elior Group, which is listed on Paris’ Euronext market and recorded annual revenues of €5,674 million in the financial year 2014-2015.  Both Caterplus and Taylor Shaw will continue to operate under their current brands as part of a new Elior company, with the management team remaining as shareholders to oversee the next phase of growth.

Richard Ibbett, Investment Director at LDC, said: “Attracting the interest of Elior Group, and to be part of its international growth strategy, is a true compliment to the quality organisation that Jim, Vince, Gabrielle and the wider management team have built in recent years. Waterfall and its brands are firmly established UK market leaders in the care and education sectors and now, with the support of one of the world’s foremost catering businesses, will no doubt go on to achieve further success. We wish the management and all the staff the best in the future.”

Jim Lovett, CEO at Waterfall Catering Group, said: “LDC backed our vision and ambition as a management team to create an even stronger business and has provided unwavering support for our growth plans ever since. The deal with Elior Group provides a highly strategic outcome for our partnership with LDC and puts us in a great position to further develop our offering to customers within our core sectors in education and care.”

Advisors on the deal included Deloitte, DWF and DSW.