Sagard to buy Eurodough for €115m

Greg Gille
08 November 2011

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Sagard Private Equity has entered exclusive negotiations with Sara Lee for the €115m purchase of French chilled dough producer Eurodough.

The investment was made via the Sagard II fund, which closed on €808m in 2006. The transaction is subject to works councils and regulatory approvals and is expected to be completed within 90 days.

The sale was run as an auction process by Rothschild and Rabobank, initiated at the beginning of the summer.

Sagard stated that Eurodough enjoys strong leadership positions in a sector poised for growth. The company, being a non-core business within the Sara Lee group, was also seen as an upside, and Sagard quickly identified opportunities to significantly improve Eurodough's operations as a stand-alone business.

Eurodough's development will partly be fostered organically through new geographies and new products. Sagard will also consider add-on acquisitions – notably in other countries in order to cut the substantial costs associated with the export of chilled products.

This transaction completes the divestment of Sara Lee's European bakery operations and will enable the group to focus on its core coffee and tea activities.

Debt
HSBC and Natixis arranged a 2.5x EBITDA senior debt package to finance the transaction, accounting for less than half of the deal value. Sagard does not exclude the possibility of refinancing the business at a later date.

Company
Established in 1974, Eurodough specialises in the manufacture of ready-made baking dough. Sara Lee became its main shareholder in 2001.

Headquartered in France, where it operates three production sites, EuroDough also has operations in Belgium, Denmark, Italy, Germany, the Netherlands, Portugal and Sweden. The company has approximately 430 employees and generated net sales of €135m in 2011.

People
Antoine Ernoult-Dairaine, Saik Paugam and Maxime Baudry handled the transaction for Sagard.

Advisers
Equity – Arjil, Bertrand Dufournier (M&A); Messier Maris & Associés, François Guichot-Perere, Edouard Giuntini (Corporate finance); Bredin Prat, Olivier Assant, Elsa Fraysse (Legal); PricewaterhouseCoopers, Guillaume Lorain (Financial due diligence); ATKearney, Jérôme Soueid (Commercial due diligence).
Vendor – Rothschild (M&A); Rabobank (M&A).