Kitwave buys Total Foodservice in £21m deal
By Josh White
Date: Thursday 28 Mar 2024
(Sharecast News) - Wholesaler Kitwave announced the acquisition of Total Foodservice Solutions on Wednesday, an independent food wholesaler operating in the North of England.
The AIM-traded firm said the acquisition entailed the purchase of the entire issued share capital of Total Foodservice for a total gross consideration of £21m in cash.
It said funding for the transaction was facilitated by using its existing banking facilities.
Kitwave said Total Foodservice, with a legacy spanning over 130 years, specialises in delivering wholesale catering supplies encompassing around 4,000 product lines, including chilled, frozen and ambient food, and non-food and cleaning products.
Total Foodservice operates from depots in Clitheroe, Lancashire, and Huddersfield, Yorkshire, serving a diverse customer base across the North of England, comprising licensed trade establishments, restaurants, coffee shops, sandwich bars, schools, universities, and the care industry.
For the financial year ended 30 April 2023, Total Foodservice reported an audited turnover of £25.4m, with a profit before tax of £2m.
Additionally, the company's balance sheet showed net assets totaling £8.5m, including £4m in cash and freehold property with a book value of £2.1m.
Following completion of the acquisition, the net cash outflow from Kitwave would amount to around £17m.
The board said it expected the acquisition to yield immediate earnings enhancement after accounting for associated costs.
"We are delighted to announce the acquisition of Total Foodservice, which is a one-stop shop for wholesale commercial catering supplies and enables us to further expand our product range offering across the North of England and in particular Yorkshire and the North West, complementing our existing foodservice offering," said chief executive officer Ben Maxted.
"Total Foodservice is a well-established business in the catering industry and we look forward to welcoming its team to Kitwave and integrating the business into our Foodservice division.
"This acquisition is in line with Kitwave's growth strategy, and we will continue to seek to identify further opportunities in the UK's highly fragmented wholesale market to deliver further value to the group and its shareholders."
At 1228 GMT, shares in Kitwave were up 3.93% at 370p.
Reporting by Josh White for Sharecast.com.
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