Palmer & Harvey MBO

UK-based wholesaler and distributor, Palmer & Harvey has received a £165m buyout offer from its existing management team. The buyout is being made by way of an offer from a new company, Firstvenus, and is being led by executive chairman Christopher Adams, managing director Graham McPherson, and finance director Christopher Little. Close Brothers Corporate Finance provided financial and debt raising advice to the management team, while Ashurst Morris Crisp provided legal advice.

Senior debt and working capital has been provided by Barclays Bank, which led the company’s previous MBO, and Burdale Financial through a five-year syndicated asset-based finance facility. Existing shareholders, who retain just short of 25 per cent of the ordinary share capital in the business, are providing mezzanine and preferred debt and equity with management providing the remaining ordinary share capital.

Anton Fawcett, chairman of Barclays Leveraged Finance, said: “Barclays led the previous MBO of Palmer & Harvey in the late 1980s and is delighted to be able to jointly underwrite the finance for this second MBO and support the next generation of management.” He added that the financing is the largest of its kind in the UK and includes a number of innovative features which he believes will transform the debt capability of the MBO market in the future.”

Palmer & Harvey is the second largest private company by turnover in the UK. In the year to April 7, 2001, the company recorded pre-tax profits of £28m on annual turnover of £3.2bn. The business supplies a wide range of food and drink products to retailers throughout the UK. Its customers include supermarkets, multiple and independent retailers. The company has 4,100 employees and currently makes around 38,000 deliveries each week through a fleet of over 780 vehicles.

Upon completion of the deal, over 2,400 staff will have the opportunity to participate in ownership and have a direct involvement in the future of the company.