Polestar Foods

Gordon Brothers Europe entered into a two-year funding deal with frozen desert manufacturer Polestar Foods Ltd’s owner, Privet Capital, to fund an operational turnaround.

Starved of liquidity and unable to leverage stock and P&M assets due to a lack of traditional bank finance, Polestar Foods had called in administrators KPMG, who subsequently negotiated the sale of the company to Privet Capital. Gordon Brothers was approached by Privet Capital to manage the turnaround.

Gordon Brothers agreed a debt facility against stock and plant & machinery and used its deep understanding of assets and its appetite to lend at high loan to value ratios to provide Privet Capital with additional liquidity, to help move the business onto a more stable footing.

The company had two main sites; one in Leamington Spa and one in Okehampton, Devon. Gordon Brothers undertook an audit of the company and advised that the business should focus on the Okehampton site and carry out an operational shut down of the site in Leamington Spa. Gordon Brothers utilised its asset disposition capability to maximise all further income opportunities from the site.

The lead came to Gordon Brothers through KPMG and also an existing relationship between Gordon Brothers and Privet Capital. The result of Gordon Brothers’ activity has meant that the future is looking a great deal more positive for Polestar Foods. It is hoped that the business will soon be sold to a competitor and will continue to grow at the Okehampton site.

Stephen Keating, Privet Capital principal, says: “Gordon Brothers’ investment has helped support Polestar’s working capital requirements, as well as giving increased liquidity and a clear plan for the future.

Despite our best efforts, we had to take the difficult decision to close the Leamington factory but, in doing so, we have saved the business, protected the Okehampton site and secured our place as one of the UK’s leading manufacturers of frozen desserts.”

Gordon Brothers is actively looking for more commercial and industrial deals where private equity firms are acquiring businesses and need the asset finance or restructuring capability that Gordon Brothers can provide.