Capman sells Cardinal Foods to Capvest and a trade player

Carmen Reichman
03 April 2013

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Capman has sold its 49% stake in Norwegian poultry and eggs producer Cardinal Foods to London-based private equity firm Capvest following at least two unsuccessful attempts at listing the business.

Prior to Capvest's secondary buyout of Cardinal Foods, Capman tried to list the company on the Oslo Stock Exchange twice. Its latest attempt was recorded by unquote" in October 2010, which followed an unsuccessfull filing in May the same year. The business later divested its subsidiary Norsk Kylling to Rema Industrier in 2011, although this did not influence the GP's holding in the company.

Capman received approximately €1.9m from carried interest income and fair value changes from its investment. The transaction itself contributed €3.7m in cash to the GP's books.

Capvest will combine Cardinal foods with Kronfågel Group, which it has acquired from Swedish cooperative Lantmännen Group as part of the deal. The newly combined group is expected to be the largest poultry producer in Scandinavia with a combined turnover of SEK 5bn.

Capvest became the controlling shareholder (52%) of the new company with Lantmännen holding a significant minority stake (48%). The GP plans to rebrand the business, which includes Kronfågel, Swehatch and Skånefågel in Sweden, Danpo in Denmark and Cardinal Foods in Norway, in the next few weeks.

Debt
Debt to support the new company was provided by Nordea and DnB Nor.

Previous funding
Capman formed Cardinal Foods in 2005 through the acquisition of two independent poultry and egg production companies – Norsk Kylling AS and Arne Magnussen. The GP invested from its Capman Equity VII fund and also provided mezzanine funding from Capman Mezzanine IV, while a senior debt package was arranged by DnB Nor. Capman took a 67% stake in the business.

The investor supported the company's growth strategy – which included organic growth, acquisitions and operational cost improvements – and saw Cardinal Foods' turnover almost double to NOK 1.623bn, with an EBITDA of NOK 130m, by 2009. Today, Cardinal Foods' turnover stands at NOK 1.3bn and the business employs around 300 people.

Company
Cardinal Foods is a producer of poultry meat and eggs. The company is based in Oslo and was formed by Capman in 2005. It consists of subsidiaries Cardinal Foods Ski, Den Stolte Hane, Jærkylling and Vestfold Fugl.

People
Kai Jordahl is a senior partner at CapMan and head of Capman Buyout.

Advisers
Equity – DC Advisory (Corporate finance); Danske Bank Corporate Finance (Corporate finance); Rabobank (Corporate finance); Rothschild (M&A); Hannes Snellman (Legal); Herbert Smith Freehills (Legal); Haavind (Legal); Andersen and Vinge (Legal); KPMG (Financial due diligence, tax); PwC (Financial due diligence, tax); Aon (Insurance due diligence).