Saturday 21 April 2018

BoI and AIB have 25% of Brosnan food group

Nick Webb

Nick Webb

Firm backed by Magnier & McManus

Bank of Ireland and AIB own a 24 per cent stake in Wellness Foods, the fast-growing posh cereal and honey company, backed by JP McManus and John Magnier.

The Irish banks have lent close to €165m to Wellness Foods, which was built up through a lightning acquisition spree masterminded by former Kerry Group boss Denis Brosnan. His Lydian Capital group, which is bankrolled by Magnier and McManus, fronted the buyout campaign. Brosnan helped set up the Swiss-based Lydian Capital after leaving the Kerry Group in 2003, having transformed the food business from a tiny operation run from a caravan in Tralee, Co Kerry, to a global player.

Wellness Foods was set up in 2005 and rapidly bulked up through acquisitions. In 2006, Wellness spent over €90m to buy high-end honey maker Rowse, quickly followed up with Sloaney breakfast cereal maker Dorset Cereal in a €75m deal the following year. The company also owns the Grove posh fruit juice brands and the Stream Foods fruit bowl and school lunch-box bar firm.

As well as owning around 25 per cent of the ordinary shares in the company, Bank of Ireland, AIB and AIB (UK) also hold over 4.5 million special "liquidity shares" in the firm. Brosnan's Lydian Capital also owns around €4.9m of the company's senior debt, although this is held through another entity called Roundwood (Finance).

The scale of Wellness Foods business has been hugely underestimated in recent times but it is now clear that the firm, which had sales of over €276m last year, is a serious player in the organic and upmarket food sector -- primarily in the UK. Last year profits rose five-fold to €4.7m.

Last month its emerged that Brosnan's Lydian Capital was seeking to sell the €300m valued Castlebeck chain of nursing homes. It is likely that investors in Castlebeck may take something of a haircut on the disposal. Brosnan and his backers have also made a fortune out of the Barchester Healthcare nursing home chain and have expanded into the US with the Trilogy chain.

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