Funding success for R&R group with £298m raised

R&R Ice Cream has raised £298m to fund expansion and acquisitions.

The UK's largest ice cream manufacturer completed a private offering of senior secured notes.

The notes, priced at 8.38 per cent, are due in 2017. The fundraising had initially been priced at 238m but was increased due to strong demand.

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The fundraising, which was managed by Barclays and Credit Suisse, also saw the Yorkshire-based company enter a new 51m revolving credit facility.

R&R, headed by chief executive James Lambert, said it will use the proceeds of the note issue to pay fees and expenses in connection with the offering, with the rest to be used for general business purposes and to finance potential acquisitions.

R&R, which is based near Northallerton, was created in 2006 by Oaktree Capital Management which, following its 180m purchase of Richmond Foods, merged Richmond Ice Cream with the German ice cream business Roncadin.

Ratings agency Moody's said of the fundraising: "It is Moody's expectation that R&R will continue to implement margin-enhancing initiatives in particular geared at improving profitability in its French operations. This should result in gradually improving credit metrics.

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"The resulting headroom in the current rating category may be used for a further expansion of the business through potential acquisitions."

The company is the third largest ice cream manufacturer and the largest private label ice cream maker in Europe, with leading market shares in the UK, Germany and France.

For the twelve months to the end of June it made revenues of about 507.8m euros and adjusted underlying earnings of 74.5m euros.

In 2009 its factories in the UK, Germany, Poland and France produced 413 million litres of ice cream products. It serves major retailers including Tesco, Asda, Aldi, Edeka, Leader Price and Carrefour.

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Earlier this year it bought France's third-biggest ice cream manufacturer, Rolland, for an undisclosed sum.

The former family-owned Rolland business was started in 1898 and has two factories – at Ploudern, in Brittany, and in the Poitou Charente region.

The Rolland business has 520 employees and produces some 65m litres of branded, private label and licensed ice cream products a year.

In the UK, R&R's brands include Nestl Ice Creams. These range from children's favourites such as FAB, Nobbly Bobbly and Toffee, to family favourites such as Smarties, Milkybar, After Eight and Rolo.

Its summer brands include Fruit Pastil lollies and Strawberry Mivvis.

R&R was the 2009 winner of the Yorkshire Post Excellence in Business Award for companies with a turnover of more than 50m.

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