Polaris nets 4x on Hamlet Protein

The sale comes as the Copenhagen-based firm continues to raise its fourth fund

Copenhagen-based Polaris Private Equity has sold its 55 percent stake in animal feed company Hamlet Protein, according to a statement.

Polaris and founding shareholder Ole K Hansen sold their combined holding to Nordic-focused Altor and Goldman Sachs Merchant Banking Division. 

Financial details of the transaction were not disclosed, but it is understood that the deal generated a 4x return for Polaris. 

Polaris declined to comment on returns. 

Polaris managing partner Jan Johan Kühl described the transaction to Private Equity International as a “really traditional Polaris deal.” 

“We supported the internationalisation, the succession, and the professionalization and diversification of the business,” Kühl noted, adding that Hamlet Protein was a family business where the founder, who wished to expand into the US, stayed on initially before making way for new management and capitalising his wealth. 

Hamlet Protein tripled in size during the investment period and now supplies 50 markets with soya-based young animal feed from a production facility in Denmark and another in the US and is planning a third facility. The company reported an annual turnover of €73 million ($80 million; £52 million) in 2014.  

Altor made the investment from its latest vehicle, Altor Fund IV, which closed on €2 billion in July 2014 after just three months in market. In December Altor used the fund to acquire a stake in Norican Holdings, a Danish provider of metallic equipment, from Mid Europa Partners, and to pick up 10 million shares in Spectrum, an Oslo-listed service provider. 

Polaris acquired Hamlet Protein in 2007 using its second fund, which is in its realisation period. The 2005-vintage, €270 million fund has made ten exits, with three investments remaining.

About 70 percent of Polaris' investments are succession deals. “It's not taboo in Denmark or Sweden for family businesses to talk about succession and on average you will see more deals come up for sale than in other markets,” Kühl said. 

Polaris is currently raising a fourth fund and has already reached its target of €400 million at its second closing. “We will keep the fund open for a while. We have room for more,” Kühl said. 

The new fund's investor base is broad, primarily European, and the re-up rate is “quite good”, he added. 

Its investment period began on 1 January. “We have a few deals in the pipeline but haven't done anything yet,” Kühl said.

Polaris Private Equity IV is expected to close by year-end and will pursue the same strategy as Polaris' previous three vehicles, which target lower mid-market buyout transactions in Denmark and Sweden with a holding period of three to seven years. 

When the fund held its first close in January on €300 million it was expected that the vehicle would wrap up fundraising before the summer. In March Polaris appointed two new investment managers, Martin Lindh and Thorsten Madsen, PEI reported earlier.