Silverfleet seals second deal in a month

The firm’s acquisition of Cimbria, a manufacturer of food processing equipment, is the third Danish buyout since December.

London-based Silverfleet Capital has agreed to purchase Cimbria, a Danish manufacturer of grain and seed processing equipment, for DKK 1,025 million (€137 million; $176 million).

The firm will acquire the majority stake from Axcel, a mid-market private equity fund headquartered in Copenhagen.

The transaction involves a rough 50/50 debt to equity financing ratio, said Gareth Whiley, a partner at Silverfleet. Debt will be provided by Danish banking group Nordea.

Cimbria was an attractive target for several macro-economic reasons, said Whiley. “For a couple of years now there’s been quite a lot of pressure on grain, partly caused by biofuels, partly because of population growth and bad harvest due to weather patterns. So we’ve been interested in exploring the macro investment thesis of the food supply chain.”

Gareth Whiley

The firm was also attracted by the geographic reach of the company. “We really like any international business headquartered in Northern Europe that we think we can help grow further internationally. We think our international network can help the company to grow in Hungary, Ukraine and Russia, where yields per hectare are considered to be lower than comparable land around the world.”

Cimbria produces equipment for cleaning, drying and storing grain and seed, as well as conveyors used in processing lines. It has total sales of around DKK 1,050 million (€140 million; £185 million), and an EBITDA close to DKK 145 million (€19 million; $25.49 million).

Silverfleet’s acquisition of Cimbria is the third deal closed in the country in little more than a month. FSN bought Skamol, an insulation manufacturer, at the beginning of December, and Axcel backed Exhausto, a supplier of mechanical ventilation systems, a few weeks later.

“Denmark has been a bit of an oddity for the last 12 months,” Whiley says. “The rest of the region has been rather quiet, but Denmark’s been quite active”.

The transaction is also Silverfleet’s second deal in less than a month, after its December investment in La Fée Maraboutée, a French retailer and wholesaler of women’s fashion. It will be Silverfleet Capital’s sixth from its current €670 million fund.

The vehicle will be close to 60 percent deployed once the investment in Cimbria completes.