Associated Fresh Foods

Milk products
Sep 1987
Dec 1990

Cinven and other investors supported the management buyout of Associated Fresh Foods (AFF) from ASDA-MFI plc in September 1987. AFF was a liquid milk and milk products business with a strong market position in the north east of England. ASDA wished to concentrate on its main national retailing operations.

AFF’s experienced management team believed that once separated from its parent the business would be able to sell to a wider range of retailing multiples, including the other major supermarkets. In addition to their doorstep milk trade they planned to augment their product range to include other beverages that could be distributed through their existing channels to market. It was felt that in the period of three to five years following investment the business would be floated.

The company was in a strong position to float but was also attractive to trade buyers. In December 1990 it accepted an offer from MD Foods, the large Danish dairy company.

Multiple returned on investment: 2.8x