The acquisition involved Palacios acquiring a majority interest in Rhokett’s shares, with the option to buy the remaining shares from the management team at a later date.
Rhokett was established in 2002 by Rhodes, Martin Dockett and Peter Le Voir and developed a reputation for making a broad range of hand-finished, restaurant-quality desserts. It has long-standing relationships with well-known, major food retailers and foodservice clients.
The company is also known for its strong in-house research and development capabilities and has invested in three production facilities in Cranbrook and Hawkhurst in Kent. This has resulted in a strong track-record of growth and profitability.
Palacios was founded in 1960 as a family butchers. It now employs more than 1,000 staff and has five production facilities in Spain and one in the US. In 2020, sales were about €255m. It sells its products in Spain, France, Portugal, the US, the UK, Belgium, and Germany, as well as in forty other countries, through retail and foodservice outlets.
Throughout its history, Palacios has grown organically and inorganically with the acquisition of other businesses, some of which still run as independent business units. It is backed by MCH Private Equity Investments, which holds 73% of its shares.
MCH, founded in 1998, is the management company of several private equity funds, which manage in excess of €1.1bn, and whose investors are well-recognised national and international financial institutions, such as pension funds and insurance companies.
“We look forward to the partnership and tremendous opportunities with Palacios going forward who we believe will be strong custodians of the key elements of the business that we and in particular Martin have built up including key customer and other stakeholder relationships, and our tremendous team,” said Peter Le Voir at Rhokett.
Pedro Dominguez, chief executive officer at Palacios Group said: “This acquisition is aligned with our strategic objectives, internationalising the Palacios Group in one of the most interesting markets such as the UK, focusing and growing in pastry, one of our ‘core’ businesses.”
Law firm Thomson Snell & Passmore advised Rhokett Limited's shareholders on the deal. Shaun Brownell and Hannah Harries both of Spayne Lindsay & Co were lead advisory on the corporate finance aspects of the transaction.
Joanne Gallagher, M&A partner and head of corporate team at Thomson Snell & Passmore led the legal team on the sale for Rhokett. She was supported by Faye Cook, Georgia Jeffery and Rachel Macmillan in the corporate team. Joanne Wright and Caroline Cohen advised on the commercial property aspects of the deal.
Due to the nature of the transaction, the deal required a multidisciplinary project team. That included Katya Batchelor advising on banking and finance matters, Ben Stepney on employment, Nitzan Cohen advising on tax, Poh-Leng Devare on commercial matters, and Mathew Boyle on pensions.
Joanne Gallagher at Thomson Snell & Passmore commented: “It is always rewarding to build a long term relationship with our clients, to support them with their growth plans and to ultimately form part of their deal team when they sell."