Rhône Capital in €1.05bn European buyout

The transatlantic firm has acquired the bakery supplies business of Dutch group CSM, less than a year after closing a €1.1bn fund.

Rhône Capital, a US mid-market firm, has agreed to buy the bakery arm of food ingredient group CSM for €1.05 billion. 

The divisions taken over by Rhône comprise the European and North American bakery units of CSM, as well as its international bakery supplies activities. These businesses generated €2.6 billion in sales and €108.6 million in EBITDA last year, and employed 8,220 staff at the end of 2012.  Rhône is also acquiring the CSM brand name. 

The transaction, which remains subject to regulatory approval in Europe and the US, is expected to complete in the third quarter of 2013. 

Netherlands-headquartered CSM is the largest supplier of bakery products worldwide. The NYSE Euronext listed group posted €3.3 billion in revenues in 2012 and employs 9,800 people. The company said this sale was part of its strategy to turn itself into a bio-ingredient company. 

“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,” added Gerard Hoetmer, CEO of CSM. 

CSM will pocket €850 million in cash proceeds from the transaction, taking into account pending liabilities such as pensions being transferred with the bakery business. 

It is an unusually large acquisition for Rhône, which tends to target companies in the $50 million-$250 million range. The New-York based firm closed its fourth buyout vehicle on €1.10 billion last year, according to PEI’s Research & Analytics division. 

Its last investment was in the carbon black division of CVC-owned Evonik, which it acquired in conjunction with Triton Partners in 2011 for a reported €900 million. 

Founded in 1997, Rhône has around €3 billion under management.