Birketts acted for Granarolo UK on its recent acquisition of Midland Food Group, a distributor of ambient, chilled and frozen food which has operated in the UK for more than 40 years.
Midland Food Group has an expected turnover of around £62m, with 244 employees operating from two sites: Willenhall near Birmingham – where it also manufactures and packs a range of fine foods – and Basingstoke. The dairy sector of Midland’s portfolio accounts for 30% of sales, but the company also distributes hams and other cooked meat products, as well as an extensive range of European meats, such as chorizos and salamis. Midland Group has a manufacturing arm producing pastry products, sandwich fillings and cooked meats and an e-commercial portal; IDeli.
Granarolo UK is the UK subsidiary of Granarolo Group, one of Italy’s largest dairy producers, with Group turnover in 2017 of around €1.3bn. The acquisition of Midland Group is not just to compliment Granarolo UK’s existing 'Made In Italy' product range, including fresh and aged cheeses, pasta, bakery and balsamic vinegars, but is also a reflection of Granarolo’s view that this acquisition will provide the opportunity to develop direct sales in the large and expanding UK food services sector. This is not Granarolo’s first investment in the UK food sector, and is a significant step forward.
Key to the transaction was the close work between Granarolo’s UK directors, Granarolo’s own in-house legal and finance teams in Bologna and Birketts' legal team - led by partner Nick Burnett and associate Alex Forwood. The Birketts team worked with both the UK and Bologna offices of Granarolo, as well as the professional team representing the Midland Group.
For Birketts, this was further demonstration of its role in the Eastern Region’s legal market, and its capacity to handle such deals, to deal and coordinate activities across international borders, and put together key legal experts to deal with a number of specialist topics.
“We are proud to represent such a major player in the European food and dairy sector” said Birketts partner Nick Burnett “and to have helped Granarolo in this recent and major investment in the UK. The Midland Group transaction involved input from a number of separate teams within Birketts in both the Chelmsford office and other Birketts offices”.
"With the acquisition of Midland Food Group we aim to make an even bigger splash in the British chilled food market, which in 2016 recorded total sales of about €100bn and keeps growing,'' said Granarolo Group Chairman Gianpiero Calzolari. "We are looking to expand the e-commerce channel already put in place by Midland.”
The acquisition of Midland puts the UK behind only Italy and France in terms of Granarolo Group turnover, and Granarolo Group’s manufacturing facility in St Omer near the Channel Tunnel is intended to play an increasingly strategic role as a result of the increased distribution capacity in the UK, with the goal of reaching €100m.
Nick Burnett of Birketts commented: “Granarolo Group is also interesting to the UK food and dairy industry in terms of how production and distribution is structured. Granarolo Group is one of Italy’s leading agro-industrial operators and comprises two distinct yet complementary areas: the agricultural consortium of milk producers, Granlatte, which collects the milk, and Granarolo S.p.A. - which processes the milk at 18 facilities across Italy, two facilities in France, three in Brazil and one in New Zealand, and markets the finished product. The Granarolo Group is, therefore, the most important milk supply chain in Italy, with producer cooperatives as its major shareholders. It unites approximately 1,000 dairy farmers, with an organisation of milk collection from farms and with 1,200 vehicles for distribution - delivering 850,000 metric tonnes a year and every day serving some 50,000 sales points where almost 16m Italy families buy Granarolo products”.