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A food manufacturer and distributor has been bought by a management team that included the son of one of the vendors in a deal backed by NBGI Private Equity.

Justin Griffiths becomes food service director after buying Peter’s Food Services from his father, John, for £20 million. He was joined in the deal by finance director David Peek and incoming managing director Mike Grimwood, whose previous positions include chief executive of Northern Foods.

John Griffiths bought the company from Grand Met ten years ago and retires following the disposal of his shares. Also leaving the business post-completion are his daughter Judith and non-executive director Godfrey Ainsworth.

The transaction was initiated and project managed by Simon Bursell, a partner at chartered accountant Dains.

Bursell has been trying to find the right acquisition for Grimwood for more than four years. Once Peter’s Food Services was identified as a potential deal, he led the negotiations and assisted management in developing their business plan.

“The team has vast experience in the savoury pastry sector,” Bursell said. “The company is well placed to continue growing and providing its customers with a first-class service.”

Bursell also raised the funding after approaching NBGI Private Equity to back the deal due to its track record of investing in the sector. The firm’s equity was complemented by debt provided by Peter’s Food’s existing banker, Royal Bank of Scotland (RBS).

NBGI Private Equity, which takes a majority stake in the business, financed the deal from its new £100 million fund. The firm’s investment was managed by director Richard Morley and Richard Babington, with the former joining Peter’s Food’s board. The buy-out team also holds an equity share of the business.

Richard Morley said the firm has backed a management team with more than 40 years’ combined experience in the savoury pastry sector.

“We are confident that the strength of the product offering combined with a strong management team will push the company to the next stage of its development and continue NBGI Private Equity’s success in backing high-growth companies since 2000,” he added.

NBGI and RBS appointed Tenon Corporate Finance to manage a financial due diligence review of the target company. The commercial review was handled by Candesic, while Cardinal examined the management team.

Tenon’s review was led by Sandeep Pancholi, an associate director of its Transaction Services division.

Pancholi said his team analysed some complex and critical issues before the deal could be completed. “This is a good opportunity for Peter’s Food Services’ high calibre management team to drive the business forward.”

Peter’s Food Services supplies chilled and frozen foods from ten sites, which include premises in London, Birmingham and Cardiff. It also makes more than 100 million pastry products each year at its site in Bedwas, South Wales.

Its products are sold across England and Wales in supermarkets, football grounds and fish and chip shops. The company was established in 1970 and today generates a £53 million turnover and employs 640 staff.

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