CSM to sell bakery supplies business in a private equity deal

Dutch food ingredients and confectionery company CSM has entered into an agreement to sell its bakery supplies business to private equity firm Rhône Capital for about €850m.

This deal is part of CSM’s strategy to transform into a bio-based ingredients company.

The businesses planned to be divested are the European Bakery Supplies and North American Bakery Supplies businesses, excluding Caravan Ingredients, and the international Bakery Supplies activities.

Additionally, Rhône Capital will also acquire the CSM brand name.

CSM CEO Gerard Hoetmer said that the intended divestment of the Bakery Supplies businesses is a milestone in the company’s development, and an important step towards its goal of becoming a leading supplier of biobased ingredients and solutions.

"Just as important, as part of Rhône Capital, the Bakery Supplies businesses, continuing with our highly appreciated workforce, will have more opportunities to develop their strong market positions in Europe and North America, build a strong presence in new markets, and lead the trend towards further industry consolidation," Hoetmer said.

The bakery supplies unit of CSM sells both bakery ingredients and ready-made goods, and was put up for sale by the company in May 2012 in line with its plan to focus on Purac and Caravan ingredients businesses.

In 2012, these businesses reported an aggregate sales of €2.56bn and aggregate EBITA excluding one-off costs of €106.8m.

Expected to be completed in the third quarter, the deal is subject to regulatory clearance from competition authorities, in Europe and the US.

Rhône Capital, headquartered in New York, is a private equity arm of Rhone Group specialising in middle market leveraged buyouts, recapitalisations, and partnership financings.