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Corporate carve-outs boost Benelux deal values

Corporate consumer carve-outs picking up
  • Ellie Pullen
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Despite the recent slow pace of Benelux’s private equity activity, a trend has emerged as firms focus their efforts on consumer corporate spinouts. Ellie Pullen reports

The most notable recent corporate consumer spinout in Benelux was the inking of CVC's deal with Campbell Soup Company to purchase a portion of its European activities. The transaction has been valued at an estimated €400m, a source told unquote".

The deal will see CVC acquire the Devos Lemmens and Royco brands in Belgium; Liebig and Royco in France; Erasco in Germany; and Blå Band in Sweden. Campbell Europe is headquartered in Puurs, Belgium.

Acquisitions of corporate carve-outs are commonplace across Europe. In Benelux, the industrial and consumer sectors are favoured most highly by GPs for spinout acquisitions.

Benelux consumer corporate spinouts attract the attention of private equity houses

Interestingly, the region's private equity players seem to have set their sights on bigger and better things this year in the corporate spinout space. So far in 2013, Benelux has experienced almost the same number of corporate spinout acquisitions as 2012, but the value of deals this year is almost three times as high as those in 2012, according to unquote" data.

Large-cap transactions, such as Rhône Capital's acquisition of the bakery supplies subsidiary of listed Dutch food group CMS, have helped boost figures for 2013 and show that the asset class is becoming more willing to pay more for the multitude of benefits that come with acquiring a carve-out. Rhone Capital acquired the CMS spinout in March for €1.05bn.

However, it is not just private equity houses vying to snap up carve-outs of big corporate brands – family offices are also becoming more active in the sector. In October, New York-based family office CoBe Capital acquired the Amsterdam-based printing systems division of listed office supplies business Staples. CoBe Capital focuses specifically on acquiring corporate spinouts, specialising in buying the under-performing and non-core assets of corporate sellers, which makes it a unique competitor to private equity firms interested in the corporate spinout space.

Taste for acquisition
CoBe's success in the world of corporate spinouts and its recent purchase in the Netherlands shows that the private equity industry is not always the first choice for a business selling off a portion of its assets.

Several GPs were reported by unquote" in July to be circling the ingredients division of Netherlands-based Vion Food Group. Firms believed to be interested in the asset included Advent International, CVC, Apax, Blackstone, Cinven and KKR.

Despite some of the largest private equity houses in Europe showing an interest in the subsidiary, Vion announced in October that it had sold its ingredients division to Darling International, a US-listed ingredients recycling company, for €1.6bn.

The sale price of Vion's ingredients division was initially reported as ranging from €1.4-2bn. Private equity firms bidding for corporate spinouts are often going head-to-head with other corporates, which were once regarded as a sure bet to pay a strategic premium. As well as this, trade players can be seen as a more obvious choice for acquiring corporate spinouts.

Private equity may have lost out on Vion's ingredients division, but the Dutch food group had already divested its UK-based pork division in December last year to turnaround player Endless, which acquired the subsidiary alongside its management.

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