Baker yields small gain for IK

After a difficult seven-year holding period, Industri Kapital has sold Continental Bakeries to NPM Capital of the Netherlands to book a single-digit IRR.

Industri Kapital, the pan-European mid-market investor, has sold Continental Bakeries, a biscuit manufacturer, to NPM Capital, a financial investor based in Amsterdam.

According to Christiian Nieuwenburg, a partner at IK based in London, Continental Bakeries was one of the firm’s less successful deals. Nieuwenburg did not disclose any financial information about the sale of the business, but he did say that IK would achieve a single-digit internal rate of return on its investment in the business.

Funds advised by the firm first invested in the company in 1999. IK then began a process of operational and strategic restructuring of the business to focus primarily on private label products in Western Europe rather than owned brands. IK also helped the company expand geographically.

According to Nieuwenburg, the restructuring proved more complicated and time-consuming than expected and required additional equity investment in the company as well as a number of management changes. Ultimately, however, the restructuring was successful, and annual sales rose from €126 million in 1998 to €175 million last year.

Nieuwenburg also said that Continental Bakeries, which is based in Dordrecht, Holland, was now well-positioned for the future. IK had put the business up for sale earlier this year and attracted “decent” interest from potential buyers.

The transaction is subject to approval by the works council and customary merger control approvals.

NPM Capital, which will own the company along with management, currently has a portfolio of 80 companies, of which 70 are located in the Netherlands.