NETHERLANDS/UK: Vion strikes deal for MBO of UK pork arm
- MBO backed by PE firm Endless
- Vion still in talks over UK poultry, read meat arm
Vion still in talks over UK poultry, red meat operations
Vion has finalised a deal for an MBO of its UK pork arm, which is among a series of assets in the country the Dutch food group is looking to sell.
The company today (13 December) confirmed UK private-equity firm Endless would back a management buy-out of the business, which supplies private-label pork products to retailers in the country.
Vion put its UK business up for sale last month, a market it said suffers from over-capacity in the meat sector and "extremely challenging" trading conditions.
Rumours management would buy the pork business had emerged in recent weeks. Seamus Carr, MD of Vion's pork business unit, led the MBO and said the deal would "secure the future for our staff, our suppliers and give our customers a seamless transition".
Carr said: "Our ambitions for the new business are firstly to maintain the excellent levels of service and product quality which have helped us secure orders from all the major supermarkets and then to build upon the opportunities in the marketplace to grow the business."
Vion's UK pork business has sites across England, Scotland and Northern Ireland. It also runs the McGees butchers business in Ireland.
The deal, backed by Endless and struck for an disclosed sum, remains subject to the approval of Irish competition authorities.
Vion, which said it is still in talks to sell its UK poultry and red meat businesses, plans to focus on its Dutch and German operations, as well as its global food ingredients arm.
Dutch-based food producer VION NV has reached an agreement for a management buy-out of its UK pork operations, securing around 4,000 jobs, subject to Competition Authority approval in Ireland.
The deal, led by Seamus Carr, managing director of VION’s Pork Business Unit, is backed by UK private equity firm Endless, which has a strong track record of investing in companies in the UK across a wide range of sectors.
Today’s announcement follows the strategic decision VION announced on 19th November that it was selling its UK food operations, employing in total 13,000 people at 38 sites, to focus on its core food activities in the Netherlands and Germany and its global ingredients business.
Discussions are ongoing with a number of prospective purchasers for VION’s other UK business units for poultry and red meat.
VION’s UK pork facilities are located in Wiveliscombe, Malton, Haverhill, Scunthorpe, Hull, Stoke and Enfield in England, at Cookstown in Northern Ireland and the pig farming and feed mill operation in Scotland at Brydock, Aberdeenshire. In addition, VION operates the McGees butchers business in the Republic of Ireland.
Mr Carr, who will be managing director of the new company said: “VION’s decision to sell its UK business naturally caused a degree of uncertainty amongst staff, suppliers and customers.
“Therefore, I’m very pleased that we have quickly been able to agree a deal for the pork business which secures the future for our staff, our suppliers and gives our customers a seamless transition.
“Our ambitions for the new business are firstly to maintain the excellent levels of service and product quality which have helped us secure orders from all the major supermarkets and then to build upon the opportunities in the marketplace to grow the business.”
Peter Barr, chairman of VION UK, warmly welcomed the management buy-out. He said: “When we announced our intention to sell, we highlighted the viability of the UK businesses and the strong interest from prospective purchasers.
“The swiftness with which we’ve been able to agree a deal with the management team of the pork business unit, which knows the company inside-out, underlines our confidence in the sales process.
“It’s therefore very encouraging that the pork business unit should be the subject of a successful and swift sale and this augurs well for our ongoing discussions with prospective buyers of the remaining areas of the business.
“This is the very best outcome and I am sure the response from everyone involved, from our farmers and suppliers, to our employees and customers, will be extremely positive.
“We will now be focussing our attentions on securing the sales of our remaining poultry and red meat operations in the UK, which employ around 8,000 people. Both businesses remain profitable and cash-generative and are generating significant interest from prospective purchasers.”
Endless is a specialist investor in UK headquartered businesses, widely known for acquiring non-core businesses from large groups. This is the latest in a string of investments in UK businesses that were previously owned by large, often overseas, parent groups including Crown Paints from Akzo Nobel N.V., Bathstore from Wolseley plc, Acenta Steel from Niagara LaSalle Inc, Davy Markham from TH Global and Amco Group from Billington Holdings plc.
A spokesman from Endless said: “We are delighted to have been selected by the MBO team to support their plans and aspirations for such a strategically important business in the UK food sector, with its focus on local produce at a time when end customers demands for British sourced food are increasing.”
VION NV entered the UK in the late 1990s with the acquisition of Key Country Foods, followed by Tranfield and subsequently Grampian Country Food Group in 2008, supplying beef, lamb, pork and chicken products to a broad range of blue-chip customers across the food retailing, food manufacturing and food service sectors.
Original source: Vion
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