Silverfleet eyes sausage casing-maker

The European mid-market player is close to making the first investment from its latest fund. It is in exclusive talks to seal German business Kalle in what would be a tertiary buyout.

Silverfleet Capital, the London-headquartered mid-market investor, has entered exclusive talks to buy Kalle, a German manufacturer of sausage casings and sponge cleaning cloths, a source close to the situation has confirmed.

Kalle: tempting for private equity

Kalle, which is currently owned by London-based firm Montagu Private Equity, has a turnover of more than €180 million and employs 1300 people, according to its website.

Montagu acquired Kalle, a Mittelstand company that makes artificial sausage casings out of viscose, plastic and textiles, in a secondary buyout from European buyout heavyweight CVC Capital Partners in 2004. Financial details were not disclosed at the time, but a source close to the deal said Kalle’s enterprise value was approximately €200 million.

If successful, this would be the first investment from Silverfleet’s €665 million fund it closed in April this year. The fund, which fell short of its target size of €1 billion, is the firm’s first fund raised from external third-party institutions.

Known since formation in 1986 as PPM Ventures, Silverfleet’s management team spun out from parent company Prudential, the UK financial services group, in November 2007. Until April, Silverfleet had focused on managing around €700 million of existing private equity investments on behalf of Prudential’s UK life fund.