Accrington confectionery manufacturer Stockley’s Sweets has been bought out of administration saving the 90 year old firm and securing the jobs of all 38 staff who potentially faced redundancy.
Leeds-based wholesaler Morris and Son (Leeds) Ltd has acquired the business that produces a wide range of boiled sweets, fudge, cinder toffee, Coltsfoot Rock and other traditional confectionery products, in order to strengthen its supply chain and broaden the range of products that the enlarged company can supply to its many wholesale and retail customers.
A whirlwind deal was pulled together in just three days by corporate finance advisers BTG McInnes as there was significant interest from numerous other parties and a quick completion was imperative to secure the deal. The deal, funded internally, sees an injection of working capital in addition to the undisclosed consideration paid for the business.
Founded in 1918, £2m turnover Stockley’s produces nostalgic favourites such as pear drops, chocolate limes, barley sugars as well as traditional cinder toffee and fudges. Over the years, the company has supplied many wholesalers and retailers, but it was the collapse of Woolworths last year that ultimately led to the failure of its parent company, Mr Lucky Bags Ltd on 23rd September 2009.
“Stockley’s has always been a very solid business that was unfortunately dragged into problems caused by the failure of its parent company,” said Andy Needham, managing director of Morris and Son.
“We saw a really good fit between our businesses and have been able to secure a deal with the administrators that saves all the jobs, helps us grow our business and creates more opportunities for Stockley’s too, so it’s a dream deal for us,” he added.
Mr Lucky Bags Ltd supplied products to Woolworths nationally, and the business was dealt a massive blow by a bad debt incurred when the retailer finally collapsed in November 2008 although it continued trading for almost 12 months, before finally collapsing last month when administrators from PWC were called in.
This is the second deal Morris & Son has completed in just five months. In June the company saved six jobs when it bought Manchester based cash & carry wholesaler and confectionery packing business Graham’s Cash & Carry following the collapse of the Loughborough headquartered business.
“The opportunity that Stockley’s presented was very attractive and the deal makes good sense for Morris & Son,” said Steve Roberts of BTG McInnes Corporate Finance.
“The management team led by Phil and Kath Lawson, the highly skilled workforce, and a well established brand and product range, are great assets. The existing strong business combined with Morris and Son financial strength, purchasing power, distribution and operating facilities, alongside many additional routes to market , should see the consolidated business bedding down very quickly indeed,” he added.
Needham became the managing director and majority shareholder of Morris and Son when he bought the firm through an MBI in August 2003.
The company has consolidated its position as a significant operator and supplier primarily in the discount food sector over recent years and has just completed its most successful trading period yet with turnover exceeding £15m in 2009.
The business previously operated from two sites; an 80,000 sq ft wholesale warehouse and cash & carry at Cross Green Industrial Estate in Leeds and the 8,000 sq ft former Graham’s Cash and Carry facility in Levenshulme near Manchester.
Trading has been robust during the credit crunch following increased consumer demand for discount food and non-food products and the subsequent growth of some of Morris and Son key customers. The firm now employs a total of 80 staff across four sites and is actively seeking further opportunities to grow the business through acquisition.
Julie is a law graduate who qualified with Price Waterhouse in 1994. Julie joined Smith & Williamson in 1997 and became a partner in 2001. With Mike Stevenson, Julie set up Middleton Partners offices in Salisbury and Southampton, both of which are now part of Begbies Traynor.
Julie is a member of the Insolvency Practitioners Association and is a Fellow of The Association of Business Recovery Professionals. Julie deals with all aspects of Corporate Recovery and turnaround work and takes all form of personal insolvency appointments.