Cerea Partners raises EUR 700m-plus for multi-asset food and beverage funds

The firm's third buyout fund, Cerea Capital III, has secured fund commitments in excess of EUR 180m and completed its initial closing in late June 2022, the GP said in a statement. It has a target of EUR 250m and hard-cap of EUR 300m, according to Unquote Data.

The fund is expected to hold a final close by the end of the year or by early 2024, Chabanel said.

The firm has already topped EUR 280m for its Cerea Mezzanine IV fund, beating its EUR 250m target, according to a statement. The fund, which is almost 50% larger than its predecessor, held a first close on EUR 215m in June 2021 and has a hard-cap of EUR 300m, Unquote reported.

A final close is expected before summer, said Chabanel, noting that fundraising is largely completed, with just a couple of investors considering to subscribe in the coming weeks.

Lastly, Cerea Dette III, which completed its initial closing in February 2022, has raised almost EUR 215m to date, said the statement. It has a EUR 350m target and expects to hold a final close by year end, Chabanel said.

The firm's debt strategy has a three-year investment period, as was the case with its predecessor Cerea Dette II, which held a final close on EUR 337m in December 2018.

As opposed to the mezzanine and equity vehicles, its senior debt funds pay interest to LPs on a six-month basis and proceeds are fully distributed back to investors, he said. It will finance buyout operations and growth investments providing senior debt mostly via secured loans and in some cases unitranche financing, he added.

Cerea's new commitments have lifted its total assets under management to EUR 1.3bn, said the statement. In spite of the difficult fundraising environment, the firm's successful fundraising is largely down to its long term presence in the market, he said.

Cerea Partners has brought in six new team members over the past 18 months, it said in the statement. It has made two additions to its private equity team, namely Benjamin Dierickx, former investment manager at Astorg, and has hired Gabrielle Poitrinal, previously with Mazars, as an associate.

Thierry Larroque has been appointed chief financial officer after holding various posts in the banking and finance sector, including with the Hines and the CBRE Global Investors groups. Déborah Rajaosafara has been appointed as ESG manager to support the firm's commitment towards responsible investing across the food and beverage industry, investing in better nutrition, better production and better living, said the statement.

Looking ahead, the firm seeks to continue growing and would consider expanding its presence, team and resources outside France to enhance dealflow beyond regions where it is already present, he said.

Investors
The firm has received commitments from a wide range of institutional investors, including banks, pension funds and insurance companies along with a number of family offices.

Dette III was supported by its core investors and also new institutional investors, such as the European Investment Fund (EIF), said the statement.

Cerea Capital III's LPs base includes mainly pension funds, funds-of-funds and bank and for a smaller portion family offices. Around 90% of its investors are expected to be from France, according to Unquote Data.

Investments
Cerea Capital III will make 10 to 12 deals and will deploy equity tickets of EUR 10m-EUR 25m, although it can make co-investments with its LPs for larger deals. It will target companies with EVs of EUR 20m-EUR 150m, Chabanel said.

The fund will deploy a large portion of its capital in France, but will also look for opportunities in Italy and Spain, where the firm has teams of senior advisers, and in western Europe, according to Unquote Data.

In July 2022, following its first close, the fund made its first investment in Groupe Ethique et Santé, a network of franchised centres specialised in treating overweight individuals upon medical prescription. It invested EUR 13.5m to buy a 65% stake in the business, Unquote reported.

The fund has also acquired a majority stake in Polaris, a French food tech company developing plant-based Omega 3 for the purification and concentration of oils based on microalgae and fish, Chabanel said.

A new investment in a company manufacturing automisation equipment for the food industry is expected to be announced in the coming weeks, he added.

The new investments have been signed and sealed and are due to be finalised by the end of May, said the statement.

Cerea has completed 26 investments investing EUR 300m over the past 18 months, it said, setting a record for the firm, said the executive.

"The dealflow has been quite good, slightly limited in the beginning of the year, but we've been seeing good quality companies," he said. "We have seen lots of opportunities in the past few weeks," he added.

When it comes to exits, the executive is bullish given the "quite high valuations" currently in the market, noting that it is more complicated to sell a company, especially for the food and beverage industry, which was significantly impacted by headwinds in 2022.

The GP's Mezzanine IV fund will invest in French and European small- and mid-cap companies operating across the food and beverage value chains and will target companies with EVs of EUR 20m-EUR 200m and EBITDA of at least EUR 5m, according to Unquote Data. It seeks to complete 20 investments in total deploying equity tickets in the EUR 4m to EUR 25m range.

The firm generally reserves 10%-15% of its funds on average to finance bolt-on acquisitions, said the executive.

The fund has already completed nine investments totaling more than EUR 130m, namely France-based pastry maker Hafner, French IT services firm TVH Consulting, sport and health supplements brand Nutrimuscle, French frozen bread producer Novepan and KFC restaurants franchiser ProNoïa.

Meanwhile, Dette III has completed 16 deals worth more than EUR 160m, said the statement, and is looking to complete 35 transactions in total, he said. Its thematic approach covers the broader universe of food and beverage and related businesses, such as packaging, IT, logistics, equipment and services, he added.

It will largely follow its predecessor's strategy, targeting companies at different growth stages ranging from those with a turnover of less than EUR 100m to companies with revenues of more than EUR 350m, according to Unquote Data.

A significant part of the debt fund is invested outside France, mostly in Spain, Italy and the Benelux, he said.

The fund's investments to date include France-based ice cream and pastry maker Compagnie des Desserts, French manufacturer of crop protection, plant nutrition and pest control products De Sangosse, France-based corrugated-paper producer Be Paper, French paper-bag manufacturing equipment company Holweg Weber, as well as several deals in Spain and Italy, said the statement.

When it comes to unitranche transactions via its debt or mezzanine fund, Cerea can underwrite between EUR 10m and EUR 80m, he said.

People
Cerea Partners – Michel Chabanel (CEO).

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