Deal generates money multiple of 2.3x
LDC has exited its investment in Ministry of Cake, the UK’s largest dedicated dessert manufacturer, in a sale to French counterpart Mademoiselle Desserts, for an undisclosed sum.
Headquartered in Taunton, Ministry of Cake produces over three million slices of hand-finished cakes, puddings and desserts every week, supplying many major restaurant, pub and coffee shop chains.
LDC backed a management buyout of the business from Greencore Group plc in May 2014 with an investment strategy to deliver major growth across all channels of the business.
The business subsequently completed the acquisition of The Creative Foods factory in Torquay using additional investment from LDC. The new site which opened in September 2014 increased production capacity by 30%, as well as enabled the launch of a new ‘tray bake’ range for the catering, foodservice and wholesale markets.
Revenues increased from £20million to almost £30million, whilst the number of employees grew from 300 to 400. During the same period, export sales increased 10% following contract wins in new markets such as Europe, Turkey, Russia and the Middle East. The sale will see Ministry of Cake continue to operate as an autonomous business in the Mademoiselle Desserts group, which manufactures cakes and desserts for the European foodservice industry. In addition to its French sites, Mademoiselle Desserts has facilities in Corby and Maidenhead.
Under the transaction, private equity-backed Mademoiselle Desserts has acquired a majority shareholding in the business, whilst the current management team, led by Chief Executive Chris Ormrod, will remain with the business.
Chris Ormrod, Chief Executive of Ministry of Cake, said: “Mademoiselle Desserts is a perfect strategic fit for us. Its international presence and wide distribution network will help turbocharge our growth plans as we look to expand our operations both at home and overseas. The strategic guidance and financial backing we have received from LDC over the last two and a half years has been fundamental to our success to date, and we now look forward to capitalising on Mademoiselle Desserts’ resources to achieve our targets. It’s another significant milestone in the continuing success story for Ministry of Cake.”
Alistair Pendleton, Head of LDC in the South West and Wales, said: “During LDC’s partnership with Ministry of Cake we have worked with the business and achieved impressive scale through organic growth and a targeted investment strategy. It has now solidified its position as a market leader in the food service industry and expanded its reach to the continent and beyond. The outcome shows just how powerful a catalyst private equity can be for ambitious management teams of Britain’s small and mid-sized companies.”
Peter Latham, Investment Director at LDC, said: “Prior to the original buyout, we worked closely with Chris and his team to develop a clear, shared vision and strategy for the business. It is fantastic to see how the partnership delivered on that ambition, creating a well-invested, quality-led manufacturing business with significantly increased sales, exports and profits. Becoming part of Mademoiselle Desserts will support the business’ growth moving forward and provides an excellent outcome for all parties.”
Didier Boudy, Chief Executive of Mademoiselle Desserts, said: “Ministry of Cake is a perfect addition to our group. Combined with our two sites in the UK, The Handmade Cake Company in Maidenhead and Mademoiselle Desserts Corby, we have now an unrivalled state of the art production capability dedicated to our foodservice customers. While integrating into the group, and using all the resources and synergies, Ministry of Cake will continue to operate from Taunton and Torquay as an autonomous business unit. The Ministry of Cake team became shareholders in Mademoiselle Desserts and will stay in place and continue running the business. Gérard Verdino, UK Chairman of the Mademoiselle Desserts Group, will coordinate the activity of the three Mademoiselle Desserts British businesses”.
LDC and Shareholders were advised by Deloitte (Martyn Gregory),Osborne Clarke (Alisdair Livingston). Momentum (Alastair Boorman) advised the Management Team and Vendor Financial Due Diligence was undertaken by KPMG (Kay Drury).View Ministry of Cake in Our Portfolio