Delta Dailyfood (UK) Limited, a leading European manufacturer and supplier of innovative frozen meals to airlines, retailers and the food service sector has undergone a Management Buy-Out from the Netherlands-based Cebeco Group.
Based in a purpose built 45,000 sq m facility in Wrexham, North Wales, Delta has the second largest market share in frozen airline food together with an established reputation for quality and flexibility. The company also supplies to the education sector, hospitals, breweries and major supermarket chains.
Its blue chip global customer base includes several major UK business class and charter airlines, major European carriers, several major American carriers and major UK retailers.
The MBO will enable Delta, which had a £8 million turnover in 2001 and is forecasting over £15 million this year, to secure and grow its existing business by enlarging its range of products and introducing new concepts (e.g. frozen and chilled snacks). It will also be able to capitalise on the drive for airline frozen meals and the opportunities in the food service sector together with enhancing their nominated preferred supplier status with the NHS.
The MBO team consists of; Barry Reynolds (54) – vice president operations, Richard Jones (34) – finance director and Christian Bris (46) – commercial director.
Barry Reynolds, who heads up the Wrexham operation commented; “We have a very strong market position and are ideally placed to capitalise on not only the airline frozen ready meal market but several new markets that we have begun to penetrate effectively in recent years.
“The new contracts secured with a major UK charter airline along with a major European carrier and the closure of the Dutch operation of Delta Dailyfood has brought in over £5 million of new contracts – so you could say we’re off to a flying start!”.
The senior management team at Wrexham have been together for four years, and along with recent new signings, the team is in place to ensure Delta Dailyfood UK Limited maintains its leading market position going forward into what promises to be a very exciting era.
Christian Bris, commercial director who has spent many years in various senior roles within the airline industry, sees the MBO as an ideal opportunity to take advantages of the well-publicised cost cutting exercises.
“There are many opportunities for Delta Dailyfood UK to develop and diversify the business going forward in following the teams core business aspirations.
“The sad events of 11th September has led to major cost cutting exercises throughout the airline industry. The move from the more expensive chilled food preparation to the more economical frozen prepared meals offers Delta the opportunity of rapidly expanding its global business,” commented Bris.
Delta, which now employs 240 plus staff (including agency), was originally established by Cebeco in 1993 to form an addition to its existing operations in Holland, Canada and the US and began trading in 1994. The ultimate parent, Royal Cebeco Group, took the decision in 2001 to sell the Delta Dailyfood Group to enable it to concentrate on its core agricultural activities.
Having made the decision to divest their interest in non-core activities the main board of Cebeco has actively encouraged the management buy-out in co-operating with the MBO team in their exciting opportunity.
Since then the American and Canadian operations have been the subject of Management Buy-Outs and in December 2001 the Dutch operation in Nieuw Vennep (near Amsterdam) closed down, with its ongoing airline contracts being transferred to Wrexham.
Financial director Richard Jones with Delta Dailyfood UK for six years welcomes the opportunity the MBO presents in managing the financial affairs of the business without the constraints of “group” policy and culture. “At last we can use our own initiatives in strategically developing the business focussing upon cost control and margin,” says Jones.
The Manchester team of Clearwater Corporate Finance, led by principal Mike Reeves and assisted by Jon Mercer, advised the MBO team.
Reeves said this is Clearwater’s seventh deal in the food sector in the last few months. “The MBO team have many opportunities ahead of them and are well experienced and respected in the industry. Their growth will derive from charter flights, which are more resilient to a downturn, introducing frozen meals to the low cost airlines and the move into the ever growing frozen ‘ready meals’ market by the major supermarkets and the public sector.”
Funding the transaction is GE Capital Commercial Finance (based in Leeds) led by Paul Goodchild. Legal advisers to the MBO team were Nick Davenport and Andrew Sturge of Turner Parkinson and Wendy Littman of Addleshaw Booth advised Cebeco.