British Pepper and Spice
British Pepper & Spice can trace its roots back more than 300 years and by the late 1990s had grown to be the second largest manufacturer of dried herbs, spices and seasonings in the UK for the retail, foodservice and food manufacturing markets.
The company was identified as part of one of our origination programmes in 1997. At the time, it was owned by Burns Philp, a large Australian food conglomerate, and deemed non-core to their business. Despite reasonable sales levels, the company was loss-making, though the appointment of a new managing director, Ian James, in 1997 had already laid the foundations for a turnaround of the business. We supported Ian and his team in the management buy-out of the business in May 1998.
The Big Idea
Despite its poor historical trading performance, the business was now managed by a strong and well motivated team. Through our own analysis and due diligence we believed that the team’s strategies for profit and business value improvement were supportable. These strategies were premised on substantial organic growth potential in its main markets, plus diversification into new added-value products, and the business was eventually acquired at a significant discount to real net asset value.
The Grand Plan
After we backed the business, we provided significant investment in much needed process plant and systems which resulted in a significant improvement in operational efficiencies and manufacturing capability. Furthermore, we supported additional investment into a new product category via the acquisition of an exclusive licence for “Gourmet Garden”, an innovative new brand of “wet herbs”.
The Bottom Line
The business grew by 50% during our period of involvement. It was sold to an overseas trade buyer, SHS Group, in August 2004, generating a return of almost four times our investment.
Date of investment: May 1998
Deal status: Realised
Date of realisation: August 2004
Investment return multiple: 3.9x cost
For more information talk to: Charles Gonszor or Neil Wallace