Deals

CD&R buys sausage case maker from Silverfleet Capital

German company Kalle has been passed through four private equity firms' hands.

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Butcher making fresh spicy salami sausage dividing the long freshly filled casing into portions for drying and curing, close up view on the newly filled membrane

Clayton, Dubilier & Rice (CD&R) has bought the industrial sausage casings company Kalle from Silverfleet Capital.

Silverfleet, which bought a majority stake in Kalle through its first independent fund for €71.5 million in 2009, anticipates an investment multiple of 3.5, and said the internal rate of return for the company is 22.5 per cent.

Silverfleet expects the deal to be completed in the next two months. The deal makes CD&R Kalle’s fourth private equity owner. The company was bought by Silverstreet from Montagu, which purchased it from CVC Partners twelve years ago. It was rumoured last year that Silverfleet was preparing for a stock market listing for Kalle.

The German company has 16 production facilities across nine countries and exports to more than a hundred. With a stronger footing in the United States and Europe, Kalle is building its market presence in the higher-growth export and import markets of South America and Asia, according to a press release. Kalle has an office in net pork exporter Chile, which has also seen pork exports to Russia increase since 2013. China, South Korea and other Asian countries are at the same time, growing meat eaters.

As well as dealing in sausage casing, the company uses wood and cotton products to produce sponges, and supplies one-third of global demand for high-quality sponge cloth.

Silverfleet Capital is a European mid-market private equity investor with around €1.6 billion under management. It was the private equity arm of Prudential before spinning out, operating under the name PPM Capital.

It has so far invested its second independent fund, which it closed last year on €870 million, in Denmark-headquartered The Masai Clothing Company and chemicals developer and supplier Coventya. Business and financial services, healthcare, manufacturing and retail, leisure, and consumer goods are the firm’s main areas of focus.

In May 2014, CD&R held a final close on $6.43 billion for Fund IX, including a $434 million commitment from the firm itself.