PRIVATE equity firm LDC has backed a £20m secondary buyout of Warrington-based catering firm Waterfall.

LDC has bought a minority stake held by YFM Equity Partners, venture capital trust Neptune-Calculus and Kaye Enterprises, since 2007 when they backed a management buyout of Caterplus.

The vendors said they had achieved a 5x return on the original investment, while sales grew to £60m and staff numbers jumped from 400 to 3,000.

The deal was led by investment director Richard Ibbett and Jonathan Bell, director and head of LDC in the North West, and who have both joined the board.

Dow Schofield Watts Transaction Services provided due diligence services for LDC.

Mr Ibbett said: “The contract catering industry is thriving with real demand for quality, cost-effective service and product, particularly as the health and education sector respond to budget challenges, but also as the Government rolls out its Free School Meals programme. In well under a decade, and with an impressive management team at the helm, Waterfall has gone from start-up to a UK market leader. We look forward to supporting the business as it continues its growth journey.”

Angela Warner, portfolio director at YFM Equity Partners, said: “Waterfall is a successful business and we have enjoyed working with the management team to grow the business over the past seven years. LDC is the right partner to help take the business to its next level of growth. We wish Vince, Jim and Gabrielle continued success.”

Mr Lovett said: “It has been a whirlwind since we launched Waterfall in 2007 and we have now established ourselves as one of the leading players in our sector. YFM Equity Partners, Calculus and Kaye were very supportive investors and they helped transform the growth of our business, including two acquisitions.

“Now with LDC, which has a great track record of working with businesses to achieve their growth ambitions, I’m confident that we can kick on and develop our offering to ensure that our customers across the country continue to receive top-class catering services.”