Alternative finance provider Secure Trust Bank Commercial Finance has provided a £21.73m asset-based lending facility to support the growth of Orchard House Foods.
The deal follows Elaghmore's acquisition of the fresh fruit business in January 2021, and will enable the business to invest in new equipment and ongoing product development.
Orchard House Foods is the UK's leading supplier of prepared fruit, fresh fruit drinks and chilled desserts to retailers across the UK and Ireland, including Marks & Spencer, Sainsbury's, Greggs and Pret a Manger. Despite the challenges posed by Covid-19, the business has remained profitable and is well positioned to take advantage of the growth opportunities presented by the easing of lockdown measures and people returning to the workplace.
UK private equity fund Elaghmore invests in companies with a view to driving organic growth, with the objective of doubling the revenue of its portfolio within the first five years of investment. Having raised a £60m fund in 2016, Elaghmore completed a £30m top-up last year to invest in UK companies.
The firm has previous experience in the global fruit market, having more than tripled the EBITDA of freeze dried fruit producer Chaucer Food Group during its hold period between 2011 and 2016.
Mike Rice, Investment Director at Elaghmore, said: 'Our knowledge of retailers, experience in the fruit market and the increasing growth of healthy snacking as a food trend meant Orchard House was a perfect fit for us. Prepared fruit is an attractive proposition to the end consumers and retailers alike, but its perishable nature requires specific knowledge and equipment to make the most of the products. We have the knowledge and when combined with the support from STB, it allows us to invest in the equipment and product development to deliver our growth strategy.'
'Throughout the pandemic we've worked really well together with Secure Trust Bank - they've been collaborative and flexible when it comes to problem solving, which has been especially valuable in the current landscape.'
Tony Young, Regional Sales Director at Secure Trust Bank Commercial Finance, said: 'Elaghmore saw the opportunity that the grab-and-go food sector provided and found a business that they knew they could add real value to. Orchard Foods already has huge growth potential, and the addition of Elaghmore's knowledge and guidance will only accelerate this.
'We worked closely with Mike to understand the plans for the business and it was clear product development was essential to its growth. We are pleased to have been able to turnaround such a flexible facility that can grow as the business does in a fairly short timeline. We're looking forward to building on this relationship in the future.'
Secure Trust Bank plc published this content on 27 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 April 2021 12:32:05 UTC.