Private-equity firm Deutsche Beteiligungs AG (DBAG) has acquired controlling interests in two large family-owned food businesses, Abbelen GmbH (Abbelen) and Oscar Mayer Limited (Oscar Mayer), via a management-controlled buyout fund, DBAG Fund VII.
Abbelen is the largest manufacturer of chilled meatballs and ready-made burgers in Germany. The products are largely sold under private-label brands to supermarket chains.
Oscar Mayer is an important manufacturer of ready meals and snacks, delivered to large grocery retailers and discounters in the UK.
The two companies will continue to be run autonomously, but will now operate under the umbrella of a joint management-holding company.
The fund says that the objective is to further build the companies’ product ranges and further internationalise the group’s distribution activities, to which add-on acquisitions will also contribute.
Abbelen and Oscar Mayer have been family owned until now. DBAG Fund VII will hold about 90% of the interests in the management-holding company.
Plans For Further Investment
An increase in group revenues to more than €500 million is targeted. To finance the transaction, a top-up fund that enables equity capital investments of up to €200 million for a single transaction will be used.
Initially, about €80 million in equity will be invested in the management holding’s first two acquisitions, of which some €15 million will come from DBAG.
Abbelen In Focus
Abbelen, with revenues of €140 million, is one of the largest private-label manufacturers of meatballs and ready-made burgers in Germany. The company produces convenience meat products in its meat-processing factory in Tönisvorst (North Rhine-Westphalia) and supplies most large supermarket and discounter chains in Germany and bordering countries.
More than half of all meatballs and burgers produced in Germany for supermarket and discounter private labels come from Abbelen, the fund said.
“We were highly successful with our products in Germany in past years. Stronger internationalisation is now the right next step for the company,” said Klaus Abbelen, who will step down from the management of the family company following the transaction.
Oscar Meyer In Focus
Oscar Mayer is one of the leading producers of chilled prepared meals in the UK. The company operates four sites in England and Wales. With a staff of about 2,650, Oscar Mayer produces more than three million chilled prepared meals and snacks a week.
Oscar Mayer’s products are sold in the UK under the private labels of leading grocery retailers and discounters, such as Sainsbury’s, Morrisons and Aldi. In its 2015/2016 financial year, the company generated revenues of £253 million (€293 million).
“We found the right partner in DBAG to successfully continue Oscar Mayer’s development jointly with the management,” said John Bigwood, whose family will now be divesting its interest.
A Growing Market
“Creating a European market leader with leading national providers of fresh convenience-food products is, in our opinion, an attractive entrepreneurial approach,” said Dr Rolf Scheffels, a member of the DBAG board of management.
“The market for ready meals and snacks is rarely cyclical, and is constantly growing at a high rate, and private labels are benefitting particularly strongly. We are investing in a very attractive segment of the food market,” he concluded.
In addition to the market growth, new, innovative products and stronger internationalisation of activities (largely focused on the domestic market until now) are expected to contribute to the group’s development plans.
The parties to the contract have agreed not to disclose the purchase price. The completion of the transaction is subject to closing conditions, including approval by the cartel authorities.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Gavin Ryan. Click subscribe to sign up to ESM: The European Supermarket Magazine.