Investindustrial carves out CSM Ingredients from Rhône's CSM

CSM Ingredients comprises the assets of the CSM group dedicated to bakery ingredients.

The investment was made via Investindustrial VII, which held a final close on €3.75bn in November 2019, surpassing its €3bn target. 

The vehicle targets lower-mid-market businesses with enterprise values of less than €200m and larger companies at the upper end of the market, with EVs in excess of €500m. It deploys tickets in the €50-100m range for its lower-mid-market deals and of around €350m for its larger deals. It also co-invests with LPs for larger and selective mid-market opportunities.

In addition, the China-Italy Industrial Cooperation Fund (CIICF) will invest alongside Investindustrial VII.

CIICF is a €600m vehicle recently launched by Investindustrial alongside China's sovereign wealth fund, China Investment Corporation (CIC), and Italian lender Unicredit. The fund invests in mid-market companies, primarily based across Italy, with the aim of establishing and accelerating their business development in China. It has a special focus on the consumer, industrial manufacturing and healthcare sectors.

Via both vehicles, Investindustrial intends to support the company by boosting its growth and international expansion.

The Italian market is CSM Ingredients' second largest in terms of annual sales, generating revenues of around €70m. In addition, it is of particular interest for the company's potential acquisitions, given the numerous niche producers currently lacking scale to fully access global markets, according to Investindustrial.

The GP plans to build a pan-European platform in the bakery ingredients segment with a significant position in Italy, able to double its revenues in the short-term.

The transaction is subject to customary regulatory approval and is expected to close by Q1 2021.

Previous funding
Rhône took private the bakery supplies businesses of listed Dutch food ingredients group CSM for an enterprise value of €1.05bn in March 2013.

The businesses comprised the European and North American bakery supplies businesses (excluding Caravan Ingredients), and the international bakery supplies activities. The GP also acquired the CSM brand name. Founded in the Netherlands in 1919, the company is currently headquartered in Atlanta, Georgia.

Company
CSM Ingredients is a manufacturer and distributor of bakery ingredients for artisanal pastry and bakery shops, as well as international retail and industrial channels.

It offers a wide portfolio of products focused primarily on bread ingredients, pastry mixes, frozen dough, fillings, glazes, toppings and icings, as well as finished products such as cakes, donuts, muffins, brownies, cookies and speciality bread. Its key brands are Artisal, Arkady, Braims, Craigmillar, Marguerite, Masterline, MeisterMarken and Ulmer Spatz.

CSM Ingredients generates annual revenues of approximately €500m by selling its products in more than 100 countries worldwide. Its main markets are Germany, Italy, France, the UK and Benelux, with a growing presence in China and Asia.

The company operates eight manufacturing facilities, including one in China and a joint venture in Tunisia.  

People
Investindustrial – Andrea C Bonomi (managing principal).

Advisers
Equity – UBS (corporate finance); Deloitte (debt advisory); Slaughter and May (legal).

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