The business

Ilchester Cheese Company Ltd (Ilchester) is the leading producer of blended cheese in the UK.

Founded in 1962, Ilchester was the first British cheese company to blend cheeses with other ingredients. Having created the market, Ilchester has continued to innovate and today sells some 50 products within the UK and exports to over 20 countries around the world.

Ilchester produces three of the top five brands, being Applewood, Mexicana and Five Counties, and enjoys a commanding market share. Consumers are increasingly moving to blended cheeses and the market has grown substantially since acquisition.

The investment

The £10 million buyout was led by John Hartz and Christian Hamilton, both of whom joined the Board of Directors. Funds managed by Inflexion invested approximately £2 million through a highly structured transaction, for a substantial majority stake.

The deal opportunity was sourced by Inflexion, who had worked with management to effect the buyout since 2001.

In November 2008, our entire stake in Ilchester was sold to Tine, a Danish milk cooperative. The exit generated a return of 2.0x our original investment and an IRR of over 20%.