Carroll Cuisine tapped for €15m to facilitate sell-off by private equity

The owners of Irish ham maker Carroll Cuisine have tapped the Tullamore company’s reserves for almost €15 million to help facilitate the estimated £1.2 billion (€1.4 billion) takeover of its parent company by a Canadian food group.

Company documents show that Carroll is being lined up to pay the dividend in four separate chunks to its shareholder Core Acquisitions, after a decision taken by its board at the end of April.

It said the cash is being redirected from the Irish meat processor to "assist the acquisition by Sofina Foods Inc of the Eight Fifty Food Group".

It was agreed in March that Eight Fifty, which was backed by Cavan dealmaker Seamus Fitzpatrick’s Capvest private-equity group, was to be sold to Canadian protein products specialist Sofina for an undisclosed sum. UK trade publication the Grocer recently estimated the price tag at £1.2 billion.

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The documents do not state whether the cash diversion will ultimately be absorbed by the seller of Carroll, Capvest, as part of the consideration for the Eight Fifty business, or whether it is being used by the new owner, Sofina, to pay off finance related to the deal.

Ultimately, the net effect of the transaction is likely to be the same: the Irish meat company’s cash pile will be reduced to facilitate the private-equity sell-off. Capvest did not respond to requests for comment last night.

Carroll Cuisine’s accounts for 2019 show that the business, which employs 300 staff, performed strongly in 2019 prior to the arrival of the pandemic. It had sales that year of €58.6 million, while profits more than doubled to above €4.5 million. It had net assets of €46.6 million and accumulated profits of €9 million.

Its 2020 accounts have not yet been filed, but it is likely that it fared even better after the arrival of coronavirus boosted Irish grocery sales by up to a fifth, as people ate more at home under lockdown.

Ready meals

Best known for its packets of sliced ham that have garnished school lunch boxes for decades, Carroll also supplies other cooked meats, ready meals and garlic breads to supermarkets.

The buyout by Sofina is the latest in a blizzard of finance-driven deals around the Tullamore ham producer. Eight Fifty had only weeks earlier completed a deal to buy Carroll Cuisine that was announced on Christmas Eve, when it picked it up from the Carlyle Cardinal Ireland (CCI) fund.

Eight Fifty last year also purchased another Irish meats company, M&M Walshe, which trades as RibWorld, Callan Bacon and Stirchley Bacon. M&M was also sold to Sofina as part of same deal.

Aryzta bought Carroll in 2004, before CCI backed a €40 million management buyout in 2015, after which sales flourished.

The business was then sold to Capvest’s Eight Fifty, which was quickly assembled over two years with a blizzard of acquisitions by its private-equity owners, creating a business with 6,000 staff across Britain and Ireland.