UK small-cap investor Inflexion Private Equity has sold Ilchester Cheese, a producer of speciality cheeses, to Tine, a Norwegian milk co-operative, for an undisclosed sum.
The exit generated a 2x return, with an IRR in the mid-20s, from an investment made in 2004. Inflexion backed a £14m MBO in December of that year, investing £5m of its own money from its 2003 fund, of which this is the fourth divestment.
Christian Hamilton, investment director of Inflexion, led the sale. He said: “Ilchester is a high quality company with a tremendous reputation for quality and innovation in the cheese market. We are very pleased to have backed the management team in successfully growing the company over the period of Inflexion’s ownership, and are confident that the company has a bright and exciting future with Tine.”
Inflexion managed to refinance Ilchester last summer, raising £5m of debt from Lloyds TSB.
Ilchester was founded in the 1960s and is the leader in the UK’s blended cheese market. It produces three of the top five brands, being Applewood, Mexicana and Five Counties.
Since Inflexion’s MBO, the business has invested heavily in the export market and in new product development. The company has achieved an 11% CAGR in revenue over the investment period.
Inflexion is currently investing from its most recent fund, which raised £165m in 2006. Its most recent investment was ICS in August 2008, which followed from the buyout of SMD in April 2008, and the sale of Tekton Group for £21m and the buyout of Pims Group both in March 2008.