Eastwood Anglo Corporate Finance | Selling my business East Midlands | Corporate finance adviser West Midlands | Management buyouts South Yorkshire

Overview

Eastwood Anglo advises on the creation of a strategic joint venture between two established UK fresh produce businesses

Transaction overview

Fresh Growers Limited, trading as Freshgro, entered into a joint venture with Strawson Limited covering the sales and promotion of Freshgro produce and the operation of its processing factory.

Eastwood Anglo director Bill Eastwood led the transaction in his capacity as Freshgro’s chairman, helping develop and negotiate the joint venture structure.

The partnership connects produce businesses with aggregate historical turnover of approximately £60.7 million, based on the latest filed accounts of Strawson Produce Ltd and Fresh Growers Limited.

The businesses
Freshgro is a Nottinghamshire grower co-operative operating as a Producer Organisation. It has an established position in Chantenay carrots and supplies whole and prepared carrots to the foodservice market.

Strawson is part of a third-generation family farming business with a strong presence supplying carrots and parsnips to major retailers. Its nearby processing facility and investment in automation complement Freshgro’s product range and market relationships.

The challenge
Freshgro sought greater market opportunities and access to additional operational capability while retaining grower ownership and its co-operative structure.

The agreement needed to accommodate accommodate retained ownership of the factory, the 700kW alternative energy plant and manufacturing equipment, along with the continuing use of the Freshgro brand and legacy obligations under the Fruit and Vegetable Scheme.

For Strawson, the opportunity was to expand its produce offering and reach complementary markets through a partnership with an established local business.

Our Role

Bill Eastwood led the transaction in his capacity as Chairman of the grower-owned business, drawing on his corporate finance and strategic advisory experience to help develop and negotiate the joint venture structure.

The transaction required the parties to address a number of interconnected commercial and structural considerations, including the future sales and marketing model, operation of the processing facility, retention of asset ownership, preservation of the existing brand and the continuing interests of grower members.

A structure was ultimately agreed under which the strategic partner became the exclusive marketing agent for the grower organisation's produce and assumed responsibility for operating its processing facility, while ownership of the facility and equipment remained with the grower organisation.

The Outcome

The joint venture created a substantially broader combined market offering and opened additional opportunities across retail, foodservice and further-processed produce.

For the grower-owned business, the structure provided access to the partner's scale, technology, investment and market relationships without requiring the organisation to relinquish ownership of its core assets or its established identity.
For the strategic partner, the transaction increased the scale of its produce offering, broadened its product and customer mix and provided entry into complementary market segments.

Importantly, the structure enabled both businesses to realise many of the strategic benefits normally associated with consolidation while retaining the characteristics that mattered to their respective stakeholders.

Eastwood Anglo Perspective
This transaction illustrates an important principle in owner-managed and agricultural businesses: a sale is not always the only route to achieving scale.

Well-structured joint ventures and strategic partnerships can provide access to new markets, operational capability and investment while allowing shareholders, members or families to retain ownership of important assets and preserve the legacy of the business.
Eastwood Anglo brings together hands-on transaction experience and an understanding of the particular commercial, ownership and stakeholder considerations that arise in family-owned and agricultural businesses.