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Legal & General Ventures Limited ("LGV"), one of Europe's leading private equity firms, has acquired from United Biscuits (Holdings) Limited ("United Biscuits") its entire 44% shareholding in Young's Bluecrest Seafood Holdings Limited ("Young's Bluecrest").

Young's Bluecrest is the largest processor of frozen, chilled and fresh seafood in the UK with a turnover of approximately £300 million. As one of Europe's leading specialist seafood businesses, Young's Bluecrest supplies quality foods to both the retail and catering sectors. The company was formed in July 1999 from the merger of Bluecrest Seafood Limited, an existing investment of LGV, and Young's, United Biscuits' frozen seafood business. The deal was structured as a joint venture with funds managed by LGV (and its associates) and United Biscuits each taking 44% of the equity of the combined business.

The businesses were highly compatible, with Young's expertise in branded products complementing Bluecrest's preminence in private label and food service operations. Today with almost 30% of the total frozen and chilled seafood markets, Young's Bluecrest boasts some of the UK's best selling seafood products, including:

• "Chip Shop" battered fish with 38% market share, having achieved brand growth in excess of 30% over the last twelve months;
• "Young's Prawns" with 42% market share, the best selling frozen product in any category at Christmas;
• "Young's Scottish Island Scampi" with 60% market share, which reported a 40% increase in like for like sales at Christmas following a successful relaunch; and
• "Ross Admiral's Pie" is the No. 1 selling frozen ready meal in the UK. Young's branded ready meals which includes "Young's Ocean Pie" has c.50% of the frozen seafood ready meals market.

Since the merger, Young's Bluecrest has embarked on a programme of capital investment and factory rationalisation which will be completed shortly. Its ten sophisticated processing plants handling the broadest range of processes in the seafood industry.

The buoyant UK market for frozen and chilled seafood, currently valued at £1.4 billion, increased 6% in 2000 and growth continues to accelerate in 2001. In order to strengthen and grow its market leading position, Young's Bluecrest has committed £5 million to advertising the Young's brand.

Following this transaction, funds managed by LGV (and its associates) will hold approximately 79% of the equity with the management and other providers of finance holding the balance.

For LGV, this represents another example of its successful buy and build approach to investments that accounts for almost half of the buyouts and buy-ins it has led since 1990. LGV also has considerable experience in teaming up with trade partners in leveraged transactions, most recently exemplified in the £1.1 billion merger of Bourne Leisure and Rank's Holiday Division.

For United Biscuits, the sale represents a successful exit from the joint venture with its proceeds representing an IRR of 35 per cent on its equity investment. United Biscuits will use the proceeds to invest in the development of its core biscuits and savoury snacks business.

Funding for the transaction is being provided entirely by senior debt from an existing syndicate of banks led by the Royal Bank of Scotland.

Commenting on the transaction, Wynne Griffiths, Chief Executive, Young's Bluecrest, said:

"The merger of Young's and Bluecrest has been a tremendous challenge for the management team. Considerable progress has been made and Young's Bluecrest now ranks among the UK's top food companies. There are significant opportunities to develop the business. We are grateful to United Biscuits for its support during the life of the joint venture and now look forward to continuing our work with LGV on the next stage in Young's Bluecrest's development."

Commenting on the transaction, Michael O'Donnell, Director, LGV, said:

"The Young's Bluecrest investment plays to several of LGV's strengths; a consumer products business which combines own label and branded goods, a business in need of manufacturing rationalisation and brand investment, an opportunity to buy and build with a trade partner and, most importantly, working alongside a committed management team with the ability to deliver results."