Invoice discounting case studies
Meaty deal seals Sunderland firm's future growth
One of the North's largest meat packers has been sold in a multi-million pound deal backed by Lloyds TSB.
Sunderland-based Northern Counties Meat provides processing and packaging services to local butchers, wholesalers and international food manufacturers.
The company's customer base includes Leiver Bros, Kepack, Bookers Cash & Carry and food service business Danish Bacon Company.
Managing Director Paul Taylor has bought the business for an undisclosed sum from a number of retiring shareholders.
The management buyout (MBO) was funded by asset based lending facilities put in place by the Newcastle office of Lloyds TSB Corporate, which will also provide the full suite of banking services.
Lloyds TSB will be lending against assets such as the debt book, stock, plant and machinery and property. This type of funding is being increasingly being used to carry out MBOs because it offers a flexible and secure way for businesses to raise finance.
Andrew Gosnay, Partner, Watson Burton LLP advised Lloyds TSB on the deal.
Northern Counties Meat was founded in 1990 following an MBO from a division of food production company, Hillsdown Holdings.
The £17 million turnover business has grown significantly over the past 12 years and currently handles over 7 million tonnes of meat a year. It employs 65 people at its 26,000 sq ft facility on Woodbine Street in Hendon.
New owner Paul Taylor has over 35 years industry experience and over the past two years has successfully driven a 50 per cent increase in efficiency by disposing of the firm's abattoir facilities and consolidating operations onto one site.
The management team has also developed new 'added value' tailored products for its customer base including the supply of specific cuts of meat to local butchers.
This strategy has allowed the business to sustain a strong level of performance despite the impact of foot and mouth, BSE and increased government controls on the processing industry.
Paul Taylor, managing director of Northern Counties Meat, was surprised at the speed in which the deal progressed. He said: "Just two weeks after walking into our local branch of Lloyds TSB and speaking to Mike Gascoigne senior relationship manager Lloyds TSB Corporate we had in place the flexible funding package and banking facilities required to complete the transaction.
The MBO puts us on a firm footing to continue steadily growing the business. We plan to further expand the added value services we offer and increase the amount of processing and portion control we currently undertake.
Northern Counties Meat has a strong management team that has shaped the current structure of the business and implemented working practice efficiencies which have helped us grow despite mounting pressures within the meat industry.
Andrew Bentley, senior regional manager at Lloyds TSB Commercial Finance which funded the MBO, said: "Paul has restructured the business over the last two years to make it a leaner operation which is less affected by over-capacity and government intervention in the abattoir sector.
Re-focussing the company into a meat packaging and added value service provider has been instrumental in the business retaining a large customer base which includes some leading names in the food industry.
By working closely with Mike Gascoigne and our colleagues in Lloyds TSB Corporate we have quickly turned this deal around and put in place facilities which will provide the working capital headroom required for Northern Counties Meat to continue its growth.
Mike Gascoigne Senior Relationship Manager Lloyds TSB Corporate North East said "Despite the original tight timescales and competitive pressure from other major lenders this deal was turned around within a fortnight of meeting the management team and I am delighted Lloyds TSB Corporate have won the mandate to assist such a first class company. As a Bank we have a major commitment to working with all our banking partners and through our involvement with Lloyds TSB Commercial Finance we particularly look forward to building on this partnership with Northern Counties Meat working with Paul Taylor and his team as the business continues to grow and prosper under his stewardship.
previous invoice discounting case study
