Ardian buys stake in European ingredients group from IK

Ardian has completed a deal to add Solina Group to its $55bn portfolio before a public sale could be announced, and will seek to expand the group internationally.

French investment firm Ardian has bought a majority stake in European ingredients provider Solina Group through its €2.8bn Ardian Mid Cap Buyout Fund V.

The firm will seek to expand the company internationally through add-ons and acquisitions, with its initial focus on Germany, the UK and Italy, the fund’s managing director, Bruno Ladiére told Agri Investor.

No financial details were disclosed, but Ladiére said Ardian had approached seller IK Investment Partners to carry out a “rapid transaction” last year because “we knew that if we waited for too long there would be a sales process next year or the end of this year”, meaning competition for Ardian and a disruptive process for the company,  he added. The  firm began talks to acquire Solina in October last year, according to Ardian’s website.

Ladiére would confirm how much capital his latest fund has deployed since it was launched in 2013, but said: “…There is a sufficient amount left in the [Ardian Mid Cap Buyout Fund V] to finance the growth of Solina,” said Ladiére.

European private equity firm IK Investment Partners, which concentrates on mid-market investments in northern and western Europe, sold their entire interest in Solina Group to Ardian in the deal.

Explaining the firm’s rationale for the investment, Ladiére, told Agri Investor: “The ingredients industry in Europe is pretty fragmented. That is our experience [as] a shareholder of Diana [a manufacturer of aromas and flavours for food, pet food, aquaculture and cosmetics].

“We believe that food companies and food service companies will value ingredients providers with more global scale.

“Solina works with food manufacturing companies, butchers who sell meat and [want to] change and improve features of the meat or delicatessen products. It’s the same with fish-based products. A mix of ingredients could include several dozen ingredients.

“It is very specific knowledge, and getting more and more complicated. It is more and more important to be able to keep up to speed on those capabilities and more and more, food retailers and producers go to work with a specific partner. That is what we have seen with Diana and the aromas with pet foods.”

Ladiére, adding that these is also a growing market for flavours from other regions, such as Asia.

He said that the mid-cap investment team, which targets companies valued between €150 million and €1.5 billion, according to Ardian’s website, actively seeks companies with a national presence in a country and the potential to expand internationally through bolt-ons and acquisitions.

After further expansion in western Europe, Solina will set its sights on eastern Europe and the US, and then Asia, according to Ladiére.

Solina was formed in 2012 through a merger between ingredients companies Savena and Sfinc under IK. The group absorbed European food company Paulig Group’s industrial flavouring division in August last year and Danish seasoning and marinade company, SFK Food, in 2014. Solina now has eight research and development centres and 10 production plants in Europe and Asia.

Ardian controls $55 billion in assets and has investment strategies including funds of funds, private debt, direct funds, infrastructure, real estate and customised mandate investment solutions. Ardian Mid Cap Buyout Fund V has allocated €400 million to co-investments.

Additional reporting by Clare Pennington.