GastroNorth Management Buyout Backed by Six-figure NPIF II - NEL Investment
A six-figure investment from NPIF II – NEL Debt Finance, which is managed by NEL Fund Managers as part of the Northern Powerhouse Investment Fund II (NPIF II), has supported the successful management buyout of North East commercial kitchen specialist GastroNorth, creating a platform for future growth while safeguarding jobs, customer relationships and supply chain partnerships.
The investment has enabled Managing Director Tim Whitfield to acquire the business and establish a long-term strategy focused on expanding market presence, investing in people, enhancing operational efficiencies and pursuing new opportunities across the commercial kitchen and catering infrastructure sector.
Based in Gateshead, GastroNorth has built a strong reputation for delivering high-quality commercial kitchen projects for customers operating across a range of sectors. The management buyout represents the next stage in the company's development, allowing the leadership team that has helped drive the business's success to take ownership and lead its future growth.
The funding will support GastroNorth's continued investment in innovation, operational excellence and workforce development, while strengthening its ability to create jobs, grow sustainably and contribute to the regional economy.
Tim Whitfield, Managing Director of Gastro North, said: "The support we received from NEL was instrumental in making our management buyout a reality. From the outset, the team took the time to understand our business, our ambitions and the opportunity ahead of us.
"The process was straightforward, professional and collaborative throughout. The funding has provided us with the stability and confidence to move forward with our growth plans, invest in the business and build on the strong foundations already in place. We look forward to an exciting new chapter and are grateful to NEL for supporting our vision."
Jane Siddle, Senior Investment Executive at NEL Fund Managers, added: "We were impressed by the strength and maturity of the business, as well as the quality of Tim's leadership team. Throughout the process, Tim demonstrated a proactive and professional approach, providing clear communication and high-quality information at every stage. This enabled us to work collaboratively and efficiently together, resulting in a smooth transaction from our initial discussions through to completion. We look forward to supporting Tim and the wider team as they continue to build on GastroNorth's success."
Clive Owen LLP’s Corporate Finance team worked closely with GastroNorth’s management team, helping to source appropriate debt finance through NEL Fund Managers and assisting with the initial valuation and deal structuring for the exiting shareholder.
Michael Dickens, Corporate Finance Manager at Clive Owen, said: “We are delighted to have supported GastroNorth on this important milestone in the evolution of the business. It was a pleasure to work alongside the management team throughout the process to deliver a positive outcome for all parties.
“The collaborative expertise and commitment of all the professional advisers involved played a significant role in ensuring the transaction progressed smoothly. Collectively, we have helped position GastroNorth for its next phase of growth, providing a strong platform for the business to build on its continued success.”
Legal advice for NEL Fund Managers was provided by Max Gilchrist and the team at Mincoffs Solicitors, while Gastro North was advised by Swinburne Maddison.
Max Gilchrist, Associate Solicitor at Mincoffs Solicitors, said: “It was a pleasure to support NEL as manager of the NPIF II – NEL Debt Finance Fund on its investment into GastroNorth and to work alongside all parties involved in bringing the transaction to a successful conclusion. This investment demonstrates a shared commitment to supporting and strengthening the North East hospitality sector, and we are proud to have played a role in helping achieve this important milestone for GastroNorth. We have thoroughly enjoyed working with the teams throughout the process and look forward to seeing the positive impact this investment will have. We wish everyone involved every success as they embark on this exciting next chapter.”
Craig Malarkey, Partner at Swinburne Maddison added: "Completing a management buyout is a significant milestone for any business, requiring careful planning and collaboration from all parties involved. Tim has a clear vision for the future of GastroNorth, and we were pleased to support him in turning that vision into reality. The business is well positioned for its next phase of growth, and we look forward to seeing what the future holds."
Operated by British Business Bank, the £660m Northern Powerhouse Investment Fund II covers the entire North and provides loans from £25k to £2m and equity investment up to £5m to help a range of small and medium sized businesses to start up, scale up or stay ahead.
Sarah Newbould, Senior Investment Manager at the British Business Bank said: “A management buyout can be a pivotal moment for an established business and GastroNorth now has the backing to take its next steps with confidence. It’s encouraging to see the Northern Powerhouse Investment Fund II supporting ambitious management teams to take the reins and invest in the future or their businesses and the future of the North.”
The purpose of the Northern Powerhouse Investment Fund II is to drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses across the North. The Northern Powerhouse Investment Fund II will increase the supply and diversity of early-stage finance for Northern smaller businesses, providing funds to firms that might otherwise not receive investment and help to break down barriers in access to finance.
NEL Fund Managers are also managing NPIF II – NEL Smaller Loans which offers investments from £25,000 to £100,000 to new and growing businesses.
For more information about NEL, please visit www.nel.co.uk or contact the investment team on 0345 369 7007.