Montagu scores 2x with sale to Silverfleet

Silverfleet Capital, the European mid-market firm, has paid €212.5 million (€247 million; $351 million) to acquire Kalle, a maker of synthetic casings for sausages based in Germany, from fellow mid-market player Montagu Private Equity.

A syndicate of lenders led by the Bank of Ireland provided a €133 million debt package for the acquisition.

Sausage casings: a growth industry

The package comprises €113 million of term debt and a €20 million revolving credit facility.

Silverfleet had been able to secure debt for the acquisition because of the “recession proof nature of the food sector”, Guido May, the Silverfleet partner who led the deal, said in a statement.

It marks the first deal from the €665 million fund Silverfleet closed in April.  According to a source close to the situation, the exit would net Montagu’s investors around two times their money.
 
Montagu paid an undisclosed amount to back the management buyout of Kalle in 2004 from European buyout firm CVC Capital Partners and subsequently invested €50 million in growing the business.

Headquartered in Wiesbaden, Germany, Kalle is one of the five largest global producers of artificial casings for sausages. The business has forecasted sales of €220 million, a statement from Silverfleet said.

Kalle’s new owners will now look to carry out a buy-and-build strategy for the business in order to further tap into a global market for sausage casings that it estimates to be €3.5 billion and growing.