AXA PE acquires frostkrone from Argantis

AXA Private Equity bought the company's entire share capital alongside management, leaving Argantis to exit fully. The GP holds more than 80% of the business.

The new owners plan to boost frostkrone's international business by expanding sales, developing products and making selective acquisitions, particularly in France and the Benelux countries.

Argantis made a 3x money multiple on its four-year investment and an IRR of approximately 25%. The GP hired corporate financier Lincoln to find a buyer, in a limited process, to take the business into its next phase of international expansion.

AXA Private Equity had known the business since 2008 and was watching its progress during the Argantis holding period. The firm was approached as a potential buyer very early on in the process and convinced the sellers with its knowledge of the food industry and its local as well as international network, AXA PE told unquote".

The auction was dominated by financial and strategic bidders but management is said to have been keen to again partner with a private equity backer so they could re-invest in the company. AXA Private Equity impressed both management and the vendor with its professional approach, Argantis told unquote".

Debt
NordLB remains the company's debt provider. The arranged debt ratio is in line with standard small cap practice, the buyer said. Leverage is estimated to stand at around 3x EBITDA.

Previous funding
SME-focused Argantis bought its majority stake in frostkrone in a 2008 MBO – a deal valued at €30m, including a debt package from NordLB.

During the holding period, frostkrone introduced new managing director Joerg Schilling, acquired fresh cheese manufacturer Bornholter in 2009 (no additional equity was injected for this bolt-on) and launched new snack products. It also reduced its exposure to the frozen fish market.

frostkrone was able to capitalise on consumers' growing appetite for frozen food, reflected in the double digit growth achieved by the frozen cheese snacks niche market in the last year.

Company
Frostkrone was founded as Engel-Food and Services in 1997. Since 2002, the company has been headquartered in Rietberg with a further production facility in Verl and a European sales office in Wildeshausen.

The company produces frozen finger food and fish for the retail and service sectors. The products are sold as private label products under the frostkrone brand. Under AXA PE, frostkrone will focus on its finger foods in the food service industry.

The business achieved sales of €36m in 2011, up from its €35m turnover in 2008. It employs 102 people.

People
Robert Stein and Christoph Borges led the exit for Argantis Private Equity. Dirk Wittneben, Marc Abadir and Florian Korp represented AXA Private Equity.

Advisers
Equity – Berenberg, Roland Weihe, Stephan Parpart (M&A); SJ Berwin, Thomas Pauls (Legal); Taxess, Gerald Thomas, Richard Schaefer (Tax); Deloitte, Egon Sachsalber, Fabio Grassi (Financial due diligence); maconda, Rainer Mayer, Fabian M. Baeuerle (Commercial due diligence); Aon, Manfred Borger (Insurance due diligence); ERM, Jan Heussen (Environmental due diligence).
Vendor – Osborne Clarke, Rudolf Hübner, Björn Hürten (Legal); BDO, Achim Schroer, Florian Rück (Financial due diligence); Lincoln International, Michael R. Drill, Dirk Langenbach (Corporate finance).

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• Topics
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