Tuesday, September 27, 2022

News: Scottish producer pounces for Rotherham popcorn maker in pre-pack deal


An independent popcorn manufacturer based in Rotherham has been bought out of administration in a pre-pack deal.

The 51 employees at SY Foods have been transferred under TUPE to the new owners - Taylors Snacks Ltd (previously Mackie's at Taypack Ltd).

SY Foods, founded in 2019, manufactures and supplies popcorn for a range of retailers and wholesalers. It was created in 2019 as a special purpose vehicle for the purchase of the business and assets from the administrators of Tommy Tucker Ltd which expanded to North Anston in 2016 but was downed by a voluntary product recall that resulted in significant losses, pressure on working capital and ultimately, insufficient further funds.

According to a report from administrators, Mazars, the 2022 administration was due to the impact of Brexit, COVID-19 and a recent significant increase in raw material and utility costs that adversely impacted the company's profitability and resulted in cashflow challenges.

Mazars were appointed on September 8 and a review concluded that there was "no reasonable prospect of rescuing the company in its existing form as a going concern due to the level of historic liabilities and reduction in margin directly attributable to the increase in the costs of raw materials and utilities as a consequence of Brexit, the coronavirus pandemic and the recent war in Ukraine."

Historic liabilities included finance facilities provided by Close Brothers relating to invoicing and the purchase of assets in 2019. These liabilities totalled over £1m and put off a potential buyer which was sought before administration.

The company had also entered into a time to pay arrangement with HMRC who came close to submitting a winding up petition in a bid to recover approximately £500k relating to PAYE, NIC and VAT.

A pre-pack sale was launched which would see the company wound up and the business and assets sold.

18 parties were interested in the business and its assets and four bids were submitted to the administrators.

Taylors Snacks Ltd was successful with a bid of £700,000.

The acquiring company was founded as Mackie’s at Taypack Ltd in 2009 as a joint venture between Perthshire potato farmers, the Taylor family, and Mackie’s of Scotland, renowned for their luxury ice cream. The Taylor family successfully acquired the ownership of the company following a buy-out earlier this year and a rebrand to Taylors Snacks, is underway.

Taylors’ popcorn will be produced at South Yorkshire Foods’ existing factory in Rotherham, which uses traditional means of cooking popcorn in large kettles.

The acquisition will also see Taylors Snacks takeover the production and distribution of South Yorkshire Foods’ renowned ‘Big Night In’ range, a popular popcorn brand listed in the likes of ASDA, Iceland and B&M to name a few.

James Taylor, Managing Director of Taylors Snacks Ltd, said: “The addition of the popcorn manufacturing business makes for a really exciting time to be at Taylors. South Yorkshire Foods produces a high-quality product packed with flavour, something we pride ourselves on at Taylors Snacks.

“The new business move will not only add an array of dedicated, talented staff, it will also add to our ever extending range of products. It made sense right away.”

The sale included all the financed assets having their finance paid and Close Brothers agreed to the deal. Secondary preferred creditors, such as HMRC, were expected to receive 50p/£ but unsecured creditors are expected to receive nothing on their debts which totalled over £600,000.

SY Foods website
Mackie's at Taypack website

Images: Mackie's / Facebook


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