Park Place Corporate Finance

Independent advice for the independently minded

Kates Cakes

£6m Management Buy-Out | £13m Secondary Management Buy-Out | £34m Sale

Kates Cakes

Kate’s Cakes is one of the most renowned and innovative hand crafted cake companies in the industry. It supplies a wide range of products into the leading coffee shop houses and some of the best known retailers including Pret a Manger, Starbucks, M&S and Waitrose. The business operates from two purpose built “kitchens” in Ashington, West Sussex.

The PPCF team acted as lead advisor on the original MBO of the business from its founder shareholders. The deal was funded by Royal Bank of Scotland Equity Finance and Royal Bank of Scotland Corporate Banking.

The business continued to grow impressively and further debt funding was raised to provide additional capacity for future growth. The PPCF team provided advice on the structuring of this additional facility.

Following a review of strategic options for the shareholders by the PPCF team, Royal Bank of Scotland Equity Finance decided to realise its investment. PPCF acted as lead advisor on the £13m secondary MBO of the business which provided management with both cash out and a significant majority shareholding going forward. The transaction was supported by Glitnir Total Capital (previously Islandsbanki) via a package of debt and equity.

In 2007, the Kate's Cakes shareholders received an unsolicited offer of £34m for the company from CSM nv, the Netherlands-based listed bakery business. The PPCF team advised the shareholders on the disposal of their shares which provided Glitnir Total Capital and the management shareholders with an exit from the company.

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