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CSM in talks to sell bakery supplies business to Rhone Capital

Published 25 March 2013

Dutch food ingredients firm CSM has agreed to sell its bakery supplies business to US-based private equity firm Rhone Capital for €1bn, in order to focus on its food ingredients businesses.

The unit, which offers both bakery ingredients and ready-made goods, was put up for sale in May 2012. The company cited weak consumer spending and high raw material prices for this decision.

The divestment of the bakery supplies business would eliminate 77% of CSM's annual sales. Following the deal, the company plans to focus on on lactic acid as well as bakery ingredients.

A CSM spokesperson said that the company plans to use the proceeds from the sale for acquisitions, return funds to shareholders, pay for pension liabilities, grow organically.

CSM's bakery supplies' sales increased upto 7.1% to €2.9bn in 2012, while the earnings before interest, taxes, depreciation and amortization increased around 11% to €134.6m, reports the Bloomberg.

Rhone Capital is a private equity arm of Rhone Group. It specializes in middle market leveraged buyouts, recapitalizations, and partnership financings. The firm seeks to invest in energy, materials, industrials, retailing, consumer staples, healthcare, and financial sectors.

CSM Bakery Supplies offer a wide portfolio of products, varying from ingredients to semi-finished and frozen, almost-ready and ready-made products. Its customers are artisan bakers, bakery chains, in-store bakeries, industrial bakeries, food service, and out-of-home. It has operations in 28 countries in Europe, Africa, North America, Latin America and Asia, with a workforce of around 8,800 people.