For Seabrook Crisps we provided vendor commercial due diligence and subsequently operations and logistics due diligence to support a sale process
Seabrook 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 Seabrook 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 and developed a compelling case for why retailers would continue to support the Seabrook brand and then undertook a series of trade interviews which confirmed 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 Seabrook 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.
We brought supply chain and logistics Associates onto the site to assess potential of the business for cost reduction, 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.
Ultimately the business was sold to LDC.