Silverfleet, Electra sell sausage casing maker Kalle to CD&R

Katharina Semke
29 April 2016

Tweet
Facebook
LinkedIn
Google plus
Send to

Silverfleet Capital and Electra Private Equity have sold German sausage casing producer Kalle to Clayton Dubilier & Rice.

The sale price, which unquote" understands stood at around €500m, equates to a 9-10x EBITDA multiple.

Silverfleet expects to achieve a return multiple of 3.5x on an investment of €71.5m, with the IRR amounting to 22.5%. Electra is expected to receive proceeds of £22m. Together with proceeds from the refinancing of Kalle in 2013, Electra's total proceeds from the investment will be £27m. This equates to a return of 3x original cost, for an IRR of 21%.

Kalle has doubled its turnover since 1997 to €281m in 2015, notably fuelled by the company's expansion in the US through the bolt-on of casings manufacturer Jif-Pak in 2010. The investors also encouraged the development of new products.

The purchase is expected to be completed during the first half of 2016.

Previous funding
Kalle was acquired by Silverfleet in September 2009 for €213m. In March 2010, Silverfleet syndicated part of its investment to Electra, which invested £9m in the business.

Montagu backed the MBO of Kalle in 2004, investing around €50m in the company's growth throughout its investment period. The company had first been bought by CVC in 1997.

Company
Founded in 1863 and headquartered in Wiesbaden, Kalle is a manufacturer of artificial sausage casings and sponge cloths. The business employs 1,700 people operating from 16 production facilities in nine countries, serving 100 countries worldwide.

People
Electra Partners – Charles Elkington (partner).
Silverfleet Capital – Guido May (partner).
Kalle – Carsten Heldmann (CEO).

Advisers
Vendors – Rothschild (M&A); Kirkland & Ellis (legal); Roland Berger (commercial due diligence); PwC (financial due diligence, tax).