Sep 3, 2006

Risk Capital Partners hooks up with Seafood Holdings

Stake in UK seafood distributor for fund chaired by Luke Johnson

Luke Johnson’s private equity fund, Risk CapitalPartners, has purchased a substantial minority equity stake in Seafood Holdings – a leading independent fresh fish and seafood distributor to the catering trade. The deal values the company in excess of £12 million.

The investment is largely a cash subscription for new shares to fund an acquisition programme by the company. Seafood Holdings is projected to have sales of £50 million by 2007. “This is a considerable investment in what we consider a well run company in a growth sector,” says Johnson, Chairman of Risk Capital Partners. “The company is ambitious – buying into smaller, often family-run operations around the UK.”

The firm is headed by Toby Baxendale, a food wholesale entrepreneur and LSE graduate, who founded the original entity in 1992 and has grown the business from scratch. It has expanded rapidly in recent years through organic growth and acquisition, and now offers a national wholesale service to the trade. The company specialises in all UK caught, wild, farmed and exotic species of fish, and has benefited from the increasing popularity of fish among diners as a healthy source of protein. In addition to the seafood companies, the group includes a catering meat business, which services London’s upscale restaurants.

“Fish and seafood distributors with traditional craft skills are playing a bigger and deeper role in the UK catering industry,” says Baxendale. “The consumption of fish is increasing as consumers move away from meat and poultry, while tastes are broadening to more exotic species – making fish a premium product. Also, the demands of the restaurant trade are changing as skill shortages and high rents make it more economical for fish to be prepared offsite by the catering fishmonger. This means we can deliver a value-added product at a price that remains attractive to the restaurants.”

“I understand the restaurant trade and knew Toby’s model made sense,” says Johnson, who in 2005 sold Risk Capital Partners’ interests in Signature Restaurants – owners of The Ivy, Le Caprice and the Strada chain. Risk Capital Partners retains investments in other restaurant chains such as the family-friendly Giraffe.