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Operational Due Diligence on Princes, one of the UK’s leading F&B Manufacturers

Situation

Food Strategy Associates were asked to provide buy-side Operational Due Diligence for a private equity fund looking to acquire one of the UK’s largest food and drink businesses, Princes Food Group, with strong branded and private label positions across several ambient categories. Core workstreams were focused on potential for cost-out, across a typical PE-ownership period, and the estimated cost-to-achieve, EBITDA benefit, and associated phasing of initiatives.

In addition, to these core workstreams, we were asked to assess the target’s compliance to key Health & Safety and Environmental metrics and assess its production capacity to meet a forward-demand plan.

What we did

Across a period of four weeks, Food Strategy Associates:

  • Visited >10 production sites across the UK, Europe and Asia
  • Analysed management information provided on the virtual data room, including:
  • Financial materials; e.g. P&L statements by production site and by business unit
  • Internal work relating to cost-out initiatives
  • Historical and forecasted CAPEX plans
  • Purchase ledgers by business unit
  • Forward-looking capacity model, and key operational metric data
  • Interviewed the target’s management team to answer specific queries relating to each workstream
  • Interviewed market / industry experts to confirm the feasibility of initiatives, and increase accuracy of CTA & associated benefit estimates

Results delivered

We provided key financial inputs for the valuation model ahead of the transaction, alongside a full report with detail on each initiatives to provide to the internal investment committee and potential co-investors. The business was eventually acquired by Newlat, a trade player.