Unigestion invests in Afinum-backed bakery chain Zeit für Brot

The deal will see Unigestion hold a significant minority stake in the business, with the Switzerland-headquartered GP joining the company’s board of directors and taking on co-controlling governance together with Afinum.

Company founder Dirk Steiger will retain a stake in the business, according to a statement from Afinum. He will step back from his CEO role and will focus on the company’s international expansion.

Burkhard v. Wangenheim, partner at Afinum, told Unquote that the company has chosen Tel Aviv for its first international site and that Steiger is to move there to focus on this.

Unigestion is to act as a financial and strategic partner due to Zeit für Brot’s growth prospects, the GP said in a statement. Following the deal, the company intends to open new locations in Germany and abroad and will screen selective B2B acquisition opportunities. 

Afinum did not run a formal exit process for Zeit für Brot, although it was contacted pre-emptively by a number of parties, v. Wangenheim said. “It was not planned to exit the investment at this point – we had built up the organisation and its expansion and IT teams, making it scalable, but this required high monetary and time investment,” he told Mergermarket. “We wanted to roll out the concept in Germany and beyond showing at least 20 stores under contract on exit – underlining best in class roll-out processes and functions.”

The GP decided to run a smaller competitive process to find the best solution for the business, the founder and the management team, v. Wangenheim said. “Unigestion had the best offer on the table and the team around Philipp Scheier (lead partner at Unigestion] did a great job in making the deal work for all parties involved. We like the business, so why not invest into a business you already know and a team you know works well together?”

The fresh investment saw Afinum transfer its stake in the company from its 2017-vintage Fund 8 to Fund 9, which has made four investments to date. “We decided to make the new investment via our new fund, when asked by Unigestion and the founder, as we needed to be able to look five or seven years into the future and see what we could achieve,” v. Wangenheim said. “This would have been too long a timeline for Afinum 8. The valuation still marks a great success for our investors.”

Zeit für Brot was valued at more than EUR 80m in the fresh investment, but v. Wangenheim declined to confirm a specific figure.

Afinum’s ninth fund was launched in 2021 with a EUR 500m target, according to Unquote Data. The vehicle deploys equity tickets of EUR 25m-EUR 75m with a sweet spot of EUR 30m - EUR 35m, targeting deals with EVs of EUR 40m - EUR 150m. The fund is expected to be 40% deployed by the end of 2022, according to a statement issued by Afinum earlier this month.

Although inflation and grain prices are hot topics for consumer and food businesses in the current environment, this has not been a critical issue for Zeit für Brot, according to v. Wangenheim “We’re supplied by regional producers for our raw materials so there are no huge overseas supply chain issues,” he said. “We have a deep value chain as we buy pure raw materials and not processed bakery products, where the knock-on effect is usually higher, so that protects us.”

Unigestion is deploying equity for the deal including PE Unternehmerkapital and Unigestion Direct II. Direct II held a final close in July 2021 on EUR 611m. The fund generally deploys tickets of EUR 10m - EUR 25m and makes investments in small- and mid-cap businesses. The GP launched its latest Direct fund in June 2022 with a EUR 1bn target, as reported.

Afinum acquired a majority stake in Zeit für Brot in 2018, deploying equity via Afinum Achte Beteiligungsgesellschaft, its 2017-vintage, EUR 410m eighth flagship fund. Düsseldorf-based National-Bank provided debt to support the buyout, according to Unquote Data. The bank has remained as the company's lender, v. Wangenheim said, with a senior recap taking place between signing and closing of the new deal.

During the investment period, the company’s sales grew fivefold, Afinum said in a statement.

The sale of Zeit für Brot marks the third exit from Afinum’s eighth fund, which has returned more than 4x money to its LPs to date on its realised deals, the GP said in a statement. The fund sold online golfing equipment retailer All4Golf in an SBO to Bregal in March 2021, followed by the trade sale of Switzerland-based diagnostic and therapeutic antibodies specialist Evitria in a deal that valued the company at more than EUR 200m.

Company
Founded in 2009 and headquartered in Berlin, Zeit für Brot is an organic bakery and café chain with branches across Germany. Its products are sold in its stores, as well as via deliveries to organic food retailers and quick-commerce stores. The company's EBITDA was EUR 3m at the time of the GP's investment and is expected to reach double-digit millions in the next 12 months, v. Wangenheim said. It had four stores in 2018 and expects to have 14-15 under contract by the end of this year, he added.

People
Afinum – Burkhard v. Wangenheim (partner); Jochen Martin (partner); Janine Schäfer (associate).
Unigestion – Philipp Scheier (partner); Manuel Boeck (associate); Johannes Kirchmayr (analyst).
Zeit für Brot – Dirk Steiger (founder, co-owner).

Advisers
Equity (Unigestion) – Rödl & Partner (financial due diligence, tax); Munich Strategy Group (commercial due diligence); K&L Gates (legal); PwC (ESG due diligence).

[Editor's note: Post publication, the article has been updated to include comments from Afinum Partner Burkhard v. Wangenheim.]

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