Cantrell & Cochrane looks set to go to the market by the end of 2001 after its first set of results since the 1998 management buyout showed the food and drinks group to be in fine shape.

It isn't generally known just how close C&C was to floating on the Dublin and London markets a year ago, before the flotation was pulled at the last minute by Allied Domecq in favour of the trade sale to the BC Partners-backed management group.

C&C has changed since the MBO - especially the balance sheet. Gone is the £100 million cash mountain that Allied Domecq took back before the sale - to be replaced by £620 million in debt and quasiequity. The management has to think in terms of things like interest cover and gearing, variables they never had to consider when C&C had bundles of cash.

But C&C is still too small to be of interest to fund managers whose focus is now Europe-wide and a couple of decent-sized acquisitions will be needed to get C&C up to the €1.2-1.5 billion enterprise value needed to register on fund managers' radar screens. Some of the peripheral brands likely to be sold off by the booze giants are the most likely acquisition targets.

Even so, C&C will head for a listing with a sizeable chunk of debt on its balance sheet and will undoubtedly raise a large dollop of cash to get that down to more plc-type proportions. It's fine for a heavily-leveraged buyout to operate on not much more than two times interest cover but public company investors would be uncomfortable with that sort of pressure on the balance sheet.