The Independents Independent Wholesaler

Agreed to acquire Creed Catering Supplies Limited

Kitwave Group plc, the delivered wholesale business, is pleased to announce that Kitwave Limited, a subsidiary of the Company, has agreed to acquire the entire issued share capital of Creed Catering Supplies Limited (“Creed”) from the shareholders of Creed, a leading independent food wholesaler in the South of England. The initial consideration payable for the Acquisition is £60.0 million in cash, with up to a further £10.0 million in cash payable over two years dependent on certain performance targets being achieved. The consideration is payable in cash with the initial consideration being financed from an increase in the Company’s banking facilities and from the Capital Raising.

Acquisition highlights

  • Creed is a leading independent family-owned Foodservice Wholesaler, with a range of customers within the leisure, hospitality, education and the care sectors.​
  • The Acquisition has an enterprise value of £70.0 million, representing an EV/LTM1EBITDA (pre IFRS16) multiple of approximately 6.9x (approximately 6.4x ex cash acquired). The initial consideration is £60.0 million, plus a two year earn out structure with maximum annual payments of £5.0 million​.
  • Additional consideration of £1.16 million is expected to be payable under a locked-box mechanism to account for current levels of working capital in Creed. Accordingly, the maximum consideration payable for the Acquisition is £71.16 million.
  • Creed recorded LTM May 2024 revenues of £130.2 million, EBITDA of £10.2 million and adjusted operating profit of £8.3 million2. Creed reported an audited revenue of £124.2 million, operating profit of £7.8 million, profit before tax of £7.8 million and net assets of £13.4 million for the financial year ended 31 December 2023 (being the date of the last filed audited accounts of Creed).
  • The Company has agreed to guarantee the obligations of Kitwave Limited in connection with the Acquisition.
  • The Directors believe that the Acquisition has compelling strategic rationale for the Group, including:

o Expected delivery of a significant earnings enhancement​;

o A significant increase in the financial scale, with the enlarged Group expected to achieve pro forma3 revenue of over £800 million, adjusted EBITDA of £55 million and adjusted operating profit of £42 million​;

o Geographic expansion, with tangible buying, operational and financial​ synergies; and

o The creation of a fully integrated national delivery network enabling future organic and acquisitive growth opportunities​.

Ben Maxted, Chief Executive Officer of Kitwave, commented:

“Creed has an exceptional heritage and is one of the UK’s leading foodservice wholesalers, so we are delighted to have reached this agreement, which will extend our Foodservice division.

“Strategically, Creed will significantly expand our geographical presence, bridging our operations in the North and South and creating a fully integrated national delivery network. In line with our buy and build strategy, Creed is also expected to significantly enhance the Group’s earnings along with providing material buying, operational and financial​ synergies.

“We are looking forward to working with Creed’s dedicated and experienced team and excited to see our Foodservice division continue to go from strength to strength.”