Scots veteran swallows up food makers for £50m

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The Independent Online

Bill Hazeldean, a veteran of the Scottish food industry, is teaming up with Duke Street Capital to snap up two food manufacturers in a deal worth £50m.

It is Mr Hazeldean's second acquisition in as many months as he seeks to create a new food empire after the £40m sale of the seafood business he built up in the 1990s to Young's two years ago. He and his new private-equity partner want to create a business catering for the lunchtime sandwich market.

Buckingham Foods, which was owned by 3i, Electra and Montagu, makes about 1.1 million sandwiches a week, while Thomas Food Group makes quiches and other savoury pastry snacks. Both produce own-label food for supermarket chains including Wm Morrison and Waitrose.

Mr Hazeldean, who will chair both businesses, said he hoped to expand their menus to include more premium products in the fast-growing "food to go" sector. These include salads, sushi and wraps. He is ploughing money into the new combined vehicle and along with the rest of the management will hold a "sizeable" stake in the company.

The lunchtime market is a departure for the 54-year-old entrepreneur, who has spent most of his career in the seafood industry. After the sale of his Macrae Food Group, which dominated the UK's ready-to-eat seafood market, he formed Food Investment Group, which he co-owns with three other partners including the former chief executive of Geest, Peter Macielinski.

Colin Curvey, a partner at Duke Street Capital, said more acquisitions were likely to follow. "The 'food to go' market is an increasingly important sector for multiple retailers, giving them an opportunity to really differentiate themselves." He said to avoid the pitfalls associated with supplying own-label food to retailers - notoriously low-margin work - the companies would target premium products.

The other investors in Mr Hazeldean's FIG are Pat Pocock, a former PricewaterhouseCoopers financier, Vince Hill, a former head of buying at Waitrose, and Cameron Brown, a business acquaintance.