Yorkshire-based Westler Foods called in administrators on December 9 citing an inability to fund its pension scheme, leading to worries over the future for 171 staff.
Administrator KPMG cut nine non-production roles when it moved in, but sold the Malton firm as a going concern to newly-formed vehicle With Comb Ltd last Wednesday, securing employment for the remaining 162 staff in the process.
KPMG said that With Comb includes some of Westler’s existing management team and was bankrolled by private equity concern RCapital Partners.
‘Well-run and profitable’
Howard Smith, KPMG restructuring associate partner, said Westler Foods was a “well-run and profitable business”, while an RCapital Partners spokesman told FoodManufacture.co.uk that his firm had invested for precisely these reasons.
“It’s a well-run business with a good team in place, and we feel there is real potential for growth through innovations in the pipeline, and the firm was in administration for all the wrong reasons: namely the pension problem.”
Westler Foods’ pension problems alone led to KPMG’s intervention, with the firm unable to fund its defined benefit pension scheme that meant a funding gap of over £15m from 2009 that the company unsuccessfully sought to address, unsuccessfully, via internal and external investment.
Although he refused to disclose the extent of his firm’s investment in Westler Foods, the spokesman insisted that RCapital Partners had invested for the long-term.
Long term investment
He allayed concerns – sometimes mooted after private equity buyouts – that RCapital was simply seeking to turn a fast buck by restoring Westler’s fortunes before quickly selling up.
“We always invest for the long-term, and we believe there is a real future both for this firm as a UK concern and for food manufacturing generally,” he said.
Smith added: “We are very pleased to have concluded the sale of the Westler Foods business, which allows a good operation to continue and preserves the employment of 162 staff.”
Family-owned Westlers was founded in 1960 and initially produced canned frankfurters; while hotdogs are its key product, the firm now produces over 240 different products.
It also produces canned and pouched food products for other brands and own-label customers, and clients include supermarkets, schools, hospitals and leisure venues.
Iit also manufactures survival rations and pouches for the British Army.