Dutch food firm CSM to sell bakery business to Rhone Capital for $1.4 bn

Dutch food ingredients group CSM NV yesterday said that it will sell its bakery business to US private equity firm Rhone Capital for €1.05 billion ($1.4 billion) including debt.

The deal has been closed at €850 million and the remainder is from pension liabilities that are being transferred with the business.

The sale comes 10-months after the Netherlands-based company had put its bakery business on the block in order to focus on its Purac and Caravan ingredients businesses.

Commenting on the sale, Gerard Hoetmer, CEO of CSM said, ''The intended divestment of our Bakery Supplies businesses is a milestone in the development of the company, and an essential step towards our goal of transforming into a leading supplier of innovative bio-based ingredients and solutions.''

Founded in 1919 as a Dutch sugar manufacturer, CSM is the world's largest supplier of bakery products and is global market leader in lactic acid and lactic acid derivatives.

The NYSE Euronext Amsterdam-listed company produces and distributes an extensive range of bakery products and ingredients for artisan and industrial bakeries and for in-store and out-of-home markets. It also produces a variety of lactic acid applications for the food, chemical and pharmaceutical industries.

CSM operates throughout Europe, North America, South America, Asia and Africa, and generates annual sales of €3.3 billion.

CSM Bakery Supplies offers 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. CSM Bakery Supplies has operations in 28 countries in Europe, Africa, North America, Latin America and Asia.

The sale includes CSM's European, US and international bakery supplies operations, as well as the CSM brand name. In 2012, the unit generated sales of €2.56 billion and aggregate EBITDA, excluding one-off costs, amounted to €106.8 million.