Hofmann Menü (Germany) - Nov 2007

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01 November 2007

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Gilde Buy Out Partners has acquired a majority stake in Hofmann Menü-Manufaktur GmbH from HgCapital, which is realising its interest. Gilde had bid for the company during the same process in 2005 after which HgCapital acquired the company. This established contact facilitated the secondary buyout when Gilde was exclusively approached through Sal. Oppenheim.

The investor has a strong interest in food companies. Hofmann Menü is a major provider in a stable market that can withstand a downturn in the economy by providing food to companies, and the investor sees significant growth potential in the market to provide food to social care organisations like hospitals and nursing homes. The investor plans further expansion into Austria, France and the Benelux region.

Debt

Unicredit Markets & Investment Banking provided the financing. Mezzanine was provided by European Capital, represented by Hans Twietmeyer and Robert von Finckenstein.

Company

Hofmann Menü-Manufaktur GmbH is a provider of frozen food products as well as on-site catering for small business canteens and organisations such as care homes, hospitals and schools. The company operates three production facilities near Boxberg-Schweigern and six distribution and logistics centres. The current daily production volume is in excess of 150,000 meals, which are manually prepared and shock-frozen after preparation. The company employs 600 full-time and 600 part-time employees.

Exit deal

HgCapital acquired the company in 2005 from US financial investor Pricoa Capital Group. In a tertiary buyout (December/January 2005, page 1, pages 32-33 and page 44). Before that, Pricoa had taken over Permira’s (then Schroder’s) majority stake in October 1999 (June 1999, page 12). At the beginning of its investment, HgCapital expected the company to grow by 5-7% annually in five years, an estimate that was exceeded by the company’s actual growth of 7-8% per annum. The investor focused the business on hospitals and other social organisations, invested in production site, new product and service offerings, significantly expanded capacity and entered new geographical markets, such as Austria.

In summer 2007, the investor considered a recapitalisation and undertook financial due diligence for potential interested parties to acquire the company. If it had not been for Gilde’s offer, HgCapital would have held the company for several more years.

People

Ralph Wyss, Nikolai Pronk and Alexander Friedrich handled the transaction for Gilde Buy Out Partners. Philipp Schwalber and J Drees handled the deal for HgCapital.

Advisers

Debt - Linklaters, Eva Reudelhuber (Legal)Equity - Kirkland & Ellis, Christian Zuleger, Sacha Lurken, Volker Kullmann, Wolfgang Nardi (Legal)Equity - KPMG, Thomas Filipczyk (Financial Due Diligence)Equity - Marsh, Uwe Heuser (Insurance Due Diligence)Equity - Simon Kucher & Partner Bonn, Dieter Lauszus, Simon Hock (Commercial Due Diligence)Equity - URS Corporation Ltd, Christine Rupp, M Lalic (Environmental Due Diligence)Management - KPMG, Jens Berberich, Mark Dudenhöfer (Tax)Management - Pöllath & Partner, Benedikt Hohaus (Legal)Management - URS Corporation Ltd , Christine Rupp, M Lalic (Environmental Due Diligence)Vendor - Clifford Chance, Burc Hesse, Joachim Hasselbach (Legal)Vendor - KPMG, Nick Hall (Financial Due Diligence)Vendor - Sal Oppenheim, C Höfer C Höfer, Wolfram Schmerl (Corporate Finance)