Father-of-three Mike Woods has completed the management buyout of the company he set up in 2009 after two of his children were diagnosed with a severe nut allergy.
Eleven years on, Caerphilly-based Just Love Food Company provides nut-free, vegan, gluten and milk-free cakes to the ‘big four’ supermarkets; Tesco, Asda, Sainsbury’s, and Morrisons. And the company – which has a turnover of £3.8million and employs 70 people – has recently launched a caterpillar cake called Archie which is suitable for vegans.
Today, thanks to a £750,000 loan and equity funding package provided by the Development Bank of Wales, Mike, 56, has been able to buyout existing shareholders and take back control of his company, with the Development Bank taking a 30% equity stake.
Managing Director Mike has been joined by three new private investors with a combined equity stake of 22 per cent. George Adams, Chris Smith and Tom Carroll, bring with them a wealth of experience – with Smith and Adams previously Managing Director and Chairman respectively of Marshfield Bakery. And Carroll the former Chief Operating Officer at Unilever.
The Board of Directors will be chaired by George Adams, who is currently chair of Rave Coffee and Banner, a school uniform business. He said: “Our vision is to be the most trusted, innovative and inclusive celebration cake brand with a business that benefits our team, customers and the community. Mike’s original insight, born out of personal experience coupled with the support of the Development Bank of Wales, means that we have all the ingredients necessary for the next stage of the journey. It’s a recipe for success.”
After finding it frustrating not being able to bring cakes home for his young family, in 2009 Mike used his skills and experience of working in the food industry to change things – producing the first celebration cakes on supermarket shelves in the UK to clearly state they were nut-free in 2010.
Explaining the inspiration behind his business, Mike said: “When my daughter Danika was first diagnosed with a severe nut allergy at four years old, times were different. There was a lot of ignorance and less awareness about allergies, and it was difficult. As a family we were all tested, and six months later, we found out that my son Rourke had the same reaction.”
“Over time, I started receiving letters from parents across the country asking us to produce gluten-free and dairy-free cakes for their children,” said Mike. “Having watched Danika being excluded from other children’s birthday parties because of her nut allergy, it was important to me to produce more cakes that included everyone, so we began adding to our range.”
The family-run business – including daughter Danika who works as a Marketing Manager – is now looking forward to a bright future.
Mike, who was introduced to the Development Bank by Frank Holmes at Gambit Corporate Finance, said: “The combined support of Gambit and the Development Bank has been instrumental as we focus on restructuring the business. We’ve got an exciting future. The mix of equity and loan from the Development Bank of Wales means that we’ve got ongoing support and counsel, as well as the working capital to deliver our vision to be the most inclusive celebration cake brand.”
Jonathan Scott, Director at Gambit Corporate Finance, who advised on the fund raising for the management buyout said: “It was a pleasure working with Mike and we are delighted to have helped him to secure funding for the deal as part of a wider succession plan for the exiting shareholders. Given Mike’s extraordinary passion and energy for the business, we look forward to seeing the business go from strength to strength in the rapidly growing market for ‘free-from’ food products.”
The £25 million Wales Management Succession Fund is financed by the Welsh Government and Clwyd Pension Fund. Loans and equity investments between £500,000 and £3 million are available for management teams seeking to own and run their business with terms range between one and seven years.
Senior Investment Executive Steve Galvin and Investment Executive Ruby Harcombe completed the deal for the Development Bank.
Ruby Harcombe said: “Just Love Food Company is a pioneering manufacturer of dietary and lifestyle-specific products with an excellent shelf-presence with the leading supermarkets. As developers of first-to-market celebration cakes, they’re meeting the requirements of the modern consumer at a time when we are all increasingly conscious of nutrition and healthy living.
“Mike and the team have got some really exciting growth plans that we’ll be facilitating with the mix of funding that we have provided from our Wales Management Succession Fund. We’re looking forward to working alongside the team and our co-investors as industry specialists.”
Berry Smith acted for Just Love Food Company and Blake Morgan for the Development Bank of Wales.