Northern Foods is selling NFT Distribution for £51m to a management buyout team led by managing director David Frankish and backed by Phoenix Equity Partners.
NFT was set up by Northern Foods in 1979 to provide chilled distribution services to the food sector. Sales for the year which ended 1 April 2006, were £111.4 million, with an operating profit of £3.9 million. Almost 90 per cent of the business is with third party customers.
Frankish, who will become managing director of the new operating company,
said: “It’s with great pleasure that we are able to take on the running of NFT as a separate business and with an existing strong customer base. The position of the company as the market leader in primary chilled distribution affords us an excellent opportunity to not only maintain our high levels of service and delivery, but also develop the business into new areas. The management buyout and independence of NFT represent an exciting opportunity for the team and we are delighted to be working alongside Phoenix as they have a proven pedigree in supporting and developing medium sized UK based businesses.”
The disposal of NFT is the first sale under Northern Foods’ disposal programme which was announced in May. It is getting rid of businesses currently representing approximately 40 per cent of group revenue to concentrate on fewer, core categories. Proceeds of the disposals will be used to reduce borrowings and the pension deficit as well as to invest for growth.
Northern Foods’ chief executive, Pat O’Driscoll, said: “Distribution is not core to Northern Foods going forward but this is a great business and we wish NFT and its employees well.”