A YORKSHIRE-based private equity firm is expected to play a major role in creating a new range of sugar-free soft drinks for British consumers after completing a corporate deal.
NorthEdge Capital has invested in the independent soft drinks company Clearly Drinks Group, backing the existing management team led by Finn O’Driscoll and Martin Thornton.
NorthEdge believes that the Government’s new tax on sugary drinks, which has been imposed as part of a strategy to combat obesity, will lead to a growing demand for beverages made from spring water.
Clearly Drinks is a soft drinks manufacturer, bottler and distributor, which operates in the flavoured spring water sector. The company specialises in sugar-free products, with brands including Perfectly Clear, 1870 Mixers, and Northumbria Spring, all of which are sourced from the firm’s on site spring.
The Sunderland-based company employs more than 70 staff and recorded turnover of £13.5m in the 12 months to December 2016. NorthEdge has invested in a number of North East businesses in recent years.
It follows the recent AIM (Alternative Investment Market) listing of Ramsdens Financial, the diversified financial services provider. NorthEdge’s investment will support the management team on the planned investment in the plant, sales resource and to deliver a pipeline of new products.
The deal was led by Northedge’s partner John Rastrick, with help from Tom Rowley, investment director, and Nicola McQuaid, investment manager. It is the fourth investment from the £300m NorthEdge Capital Fund II.
Mr Rastrick and Ms McQuaid will join the Clearly Drink’s Board as non-executive directors and Peter Cheung, who is also the chairman of the ex-NorthEdge portfolio company Accrol Group, will join as chairman.
Mr Rastrick said: “We are delighted to support Finn, Martin and the team as they lead Perfectly Clear into new market opportunities.
“As more and more health-conscious shoppers look for alternatives to calorie-packed beverages following the pending introduction of the sugar tax, the demand for sugar-free, naturally flavoured products will continue to grow.
“Clearly Drinks is well placed to be at the forefront of that movement, and we are looking forward to working with the firm’s experienced management team to convert the pipeline of exciting new product development opportunities in this evolving market.”
Mr O’Driscoll, the chief executive at Clearly Drinks, said: “We are excited about what we can achieve together, and with a buoyant market and strong team in place, this company is poised to go from strength to strength.”
NorthEdge was supported by Grant Thornton (Richard Goldsack/Chris Archer/Duncan Morpeth), Bond Dickinson (Simon Pilling/James Cook/Catherine Willis), CIL (Seb Chambers/Liam McGuinness), Henderson (Jon Harrison), PWC (Joel Smith/Tom Bennett) and Syngroup (Susanna Mitterer/ Bernhard Morawetz).
The company was advised by Livingstone Partners (Patrick Groarke/Karen Dawaf Harron), DWF (Frank Shephard/Darren Ormsby / Francesca Kinsella) and Saffery Champness.
NorthEdge Capital manages £525m of private equity funds aimed at the lower-mid market buy-out and development capital transactions.
The private equity firm is based in Leeds and Manchester. It is focused on investing in the North of England. It closed its maiden Fund in 2013 at £225m and closed Fund II at £300m in March 2016.
NorthEdge Capital focuses exclusively on Northern-based companies seeking equity investments to support MBOs, development capital and equity release. NorthEdge typically invests between £5m-£45m, focusing on established businesses, typically with a turnover greater than £10m and profits greater than £1.5m.