Permira sells Provimi for €1.5bn

Cargill was identified as a potential bidder in June when details of an auction process, run by JP Morgan, surfaced. A number of other trade buyers such as Dutch Nutreco and Royal DSM, as well as Chinese agriculture business New Hope Group, were thought to have put bids in for the company. The investor believed that it would be of strategic benefit to Provimi if a trade buyer acquired it.

The key driver behind the exit was said to be the fact that the company had positioned itself well to benefit from a strategic acquirer during the four-year period of Permira ownership. A return on investment has not been disclosed, however it is thought that the sale resulted in a 2.3x multiple for Permira.

Previous funding
CVC Capital Partners and PAI partners acquired a 53.66% stake in Provimi through a take-private transaction in 2002. The stake was bought from Edison for €13.25 in cash per share, giving the deal a total value of €185.5m. CVC and PAI launched a tender offer to acquire the remaining shares and in January 2003 the newco owned a 74.05% stake.

In 2007, Permira acquired the 74.05% stake held by CVC and PAI. The deal was valued at €584m. In 2009, Permira announced that it would take the Euronext-B listed company private after exceeding the 95% stake threshold. During Permira's ownership, the company's management team transformed the business from a group of individual businesses into an integrated international organisation. It also disposed of non-core assets such as Hungary-based pet food manufacturer Provimi Pet Food (PPF), which was sold to Advent International for an enterprise value of €188m in March 2011.

Since 2007, the company has achieved gross profit growth of approximately 5% per annum while its EBITDA for the first half of 2011 was up 20.3% to €86m.

Company
Rotterdam-based Provimi was founded in 1927. It posted a €1.6bn turnover and €117m EBITDA for 2010. The company specialises in animal nutrition and employs approximately 7,000 people.

People
Charles Sherwood and Philip Muelder worked on the deal for Permira.

Advisers
Equity – JP Morgan (Corporate finance); Freshfields (Legal); PricewaterhouseCoopers (Financial due diligence).

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• Topics
• Benelux
• Consumer
• Exits
• Permira
• Trade sale
• Netherlands
• JP Morgan
• Freshfields Bruckhaus Deringer
• PricewaterhouseCoopers