menu

Commercial Vendor Due Diligence, Seabrooks Crisps

Details

Seabrooks was a privately owned Yorkshire based branded crisp business – Number 3 in the market for mainstream crisps behind Walkers and Intersnack.  The business was being sold and in anticipation of a sale process involving both strategic and private equity bidders, we were asked to prepare vendor commercial due diligence.

We worked closely with Jonathan Bye, CEO of the business and his senior management team to develop a report on the business commercial performance analysing historical trends and demonstrating how they provided a basis for business plans and strategies.  By analysing scan and panel data we demonstrated the strong performance of Seabrooks both within its core heartland regions of the North of England and across the country as a whole, both in absolute KPI’s of rate of sale but also measuring these kpi’s relative to competitors.  We assessed retailer margins and profits against competitors and developed a compelling understanding of why retailers would continue to support the Seabrooks brand and we then undertook a series of trade interviews which confirmed widespread retailers enthusiasm and support for the Seabrooks brand and business model and their continued commitment to its development.

Our report contained an assessment of markets and market trends, competitor profiles, share and business performance of Seabrooks and customer interviews that is normal to VDD reports.  In addition we examined the underlying drivers of historic growth and provided a forensic explanation of future growth that underpinned the business projections.  As part of our work we also identified areas of growth that had not been fully exploited by the management plan and therefore were able to support management in presenting the business with a more aggressive base plan.

As part of our commercial assessment we also brought supply chain and logistics Associates onto the site to assess potential of the business for cost reduction.  We reviewed management cost reduction plans and options and identified a level of cost reduction opportunity that management could add to their business plans as an upside plan and remain on a prudent and defendable basis.

Throughout the process we provided informal advice and support to management on the M&A process and worked in collaboration with other advisers particularly McQueen (M&A) and KPMG (Financial due diligence)

As the process progressed, we supported management in their development of an Information Memorandum and preparation for the management presentation.  We presented to bidders and lending banks and addressed Q&A on the business through the later stages of the process.

Once the process had narrowed to 2 PE bidders we undertook additional elements of due diligence for each of the parties.  These included operational due diligence to validate the cost reduction opportunities, capacity review of the business and some final validatory customer interviews.

The business was sold to LDC in July 2015.

Jonathan Bye, CEO of Seabrooks said about out work: 

What impressed us about Food Strategy Associates was how quickly they understood the drivers of our business performance and our sale process, and also the quality of the team they brought in.

Within days of starting on the project they’d worked through the data we’d compiled and had begun to distil out the key messages which bidders would want to probe and question further.

They brought deep insight and constructive challenge to our sale process alongside detailed analytical support and the quality of their VDD report was first-rate

Their team “spoke our language” and brought senior-level experience & authority to both the commercial and supply chain questions raised through the process. They also demonstrated great integrity throughout

When asked by some of the bidders in the process if they could themselves mandate Food Strategy Associates on additional due diligence scope we didn’t hesitate to recommend them

In summary, Food Strategy Associates not only delivered first class work against our original brief, but gave us advice and support through the process which went beyond what we’d requested or expected