Lion Capital has taken an early partial exit on its investment in bakery business Hiestand by selling its 32 percent stake to rival IAWS Group for a mix of cash and shares in the enlarged group.
Lion Capital has taken approximately 12.7 million new IAWS shares and €30 million in cash for an 8 percent stake in the combined business, whichwill be renamed Aryzta.
Lyndon Lea, partner of Lion Capital, is joining the board of IAWS. Completion of the acquisition of the shares owned by Lion Capital will result in IAWS owning approximately 64 percent of Hiestand.
Kelly Mayer, a partner at the firm, said: “We had a wide range of options. It was the best strategic step for long-term value creation. There is a very attractive trend supporting this category.”
Under Swiss takeover rules IAWS is obliged to make a public takeover offer to acquire all of the outstanding Hiestand shares. IAWS and Aryzta have said they will submit a public exchange offer on the same terms as the merger.
Aryzta will be chaired by Denis Lucey, chairman of IAWS, and deputy chaired by Wolfgang Werlé chairman of Hiestand. All of the existing directors of IAWS and Hiestand will join the board of Aryzta, as will Lyndon Lea.
On a combined basis the two companies had pro forma revenue of €2.3 billion based on IAWS figures as of financial year ended 31 July 2007 and Hiestand figures as of financial year ended 31 December 2007.
It is expected that the merger will be completed in the third quarter of 2008.
Aryzta is incorporated in Switzerland and application will be made for Aryzta's shares to be admitted to listing on the official list of the Irish Stock Exchange and the SWX Swiss Exchange.
Once listed the Aryzta shares are expected to be included in the ISEQ index in Ireland and the SPI index in Switzerland.