Magnum’s Seda Coffee deal falls through

Susannah Birkwood
25 July 2011

Tweet
Facebook
LinkedIn
Google plus
Send to

Magnum Capital Partners’ bid to acquire a 50% stake in Seda Coffee has fallen through, despite its announcement last April that the deal would go ahead.

The private equity firm decided to ditch the transaction after reviewing the results of the due diligence carried out on the business. A significant difference was said to have been found between the numbers presented by corporate financiers Rothschild and Rabobank and those uncovered by financial and management due diligence advisers Deloitte and Bain.

Seda Coffee, a newly-created subsidiary of Spanish coffee company Seda Solubles, was created with the aim of bringing together all of the parent company's manufacturing, commercialisation and distribution activities. Magnum had been attracted to the deal due to Seda's positioning in the global market and the quality of both its products and reputation.

The deal was expected to have an enterprise value of around €150m.

Palencia-based Seda Solubles is a major Spanish producer and distributor of freeze-dried coffee. It was founded in 1957 and generated a turnover of €100m last year. It was the first European company, after Nescafe, to produce instant coffee and now commands a 5% market share alongside Sara Lee.