LDC backs MBO of Vital Ingredient

Leading mid-market private equity firm LDC has invested over £8m in the management buyout of Vital Ingredient, a leading healthy food-to-go retailer. The deal will support the roll-out of the group throughout the UK, with the South West identified as an area for regional expansion. Santander will provide a further £4m of funding to support the growth plan.

Founder and Cheltenham-based Alex Heynes, opened its first store in London’s West End 15 years ago, and the business now operates 17 stores in the capital which offer a range of fresh, healthy, natural and responsibly-sourced ingredients for consumers to create their own food-to-go meals. Its offer includes salads that are tossed to order in front of the customer from a choice of over 65 ingredients and dressings, a selection of hot food and soups, superfood smoothies, desserts and snacks. The business has also recently launched a new breakfast offering and its non-lunchtime trade is growing strongly. In addition to its retail outlets, Vital Ingredient also runs an online delivery service and a click and collect offering.

Employing over 200 people, Vital Ingredient has more than doubled turnover in the last three years thanks to increasing demand amongst time-pressed city workers for healthy grab-and-go meals.

The buyout team led by Alex includes Managing Director Paolo Peretti and Finance Director John Moulton. The transaction was led by LDC investment directors Simon Hemley, Alistair Pendleton, and Peter Latham, with Hemley and Pendleton joining the board as Non-Executive Directors.

Graham Turner, former CEO of restaurant group Tragus – whose brands included Café Rouge, Strada and Bella Italia – will join the board as Non-Executive Chairman. Graham is also the Non-Executive Chairman of The Liberation Group, the leading Channel Islands and West Country pub, brewer and drinks business, and Barburrito, the award-winning Mexican restaurant chain.

The transaction was advised by the Bristol Corporate Finance Community with Isca Ventures (lead corporate finance advisers), Burges Salmon, PwC, TLT Bristol teams all involved. The vendors were advised by Altium and Charles Russell Speechlys.

The deal will enable the business to continue growing its London presence and support expansion into new cities across the UK. LDC are backing management to more than double the estate within the next three years to at least 35 stores. It will also be introducing new store formats and exploring new brand partnerships as part of its growth strategy.

Commenting on the deal, Paolo Peretti said: “We have seen rapid growth in recent years in line with the ever-increasing demand for on-the-go, healthy eating. Our brand sits right at the heart of that market, providing thousands of people with convenient options that also provide quality nutritional content and maximum choice. Having the support of an experienced and supportive investment partner like LDC will give us the additional firepower needed to secure new stores and accelerate growth.”

Simon Hemley, Investment Director at LDC in the South West, added: “Vital Ingredient has a strong platform for growth, we have been impressed by strong customer feedback and believe we have identified a business with an ambitious leadership team and unique market proposition that taps into modern day consumer eating habits. This investment demonstrates LDC’s commitment to supporting the growth of ambitious UK-based companies, using our funding and balance sheet strength, and strategic expertise to create scale and sustainable value.”

Al Halcrow, Director at Isca Ventures, commented, “Vital is a great business that meets the consumers desire for healthy eating at lunch.  We were delighted to use our sector experience from deals such as Loungers, Friska, Taylor Street and Parsons Bakery to assist in completing this buy out. We wish LDC and the team all the best going forward.”

We would like to thank the Isca Ventures team for their assistance in this process.  Without their detailed knowledge of the sector investors, understanding of the key business dynamics that makes our business attractive and their determined approach to the deal we would not have managed to get this deal completed.  Thanks to this deal we are now primed for growth.

Paolo Perretti - Managing Director, Vital Ingredient