The Ebro Foods group has agreed to sell its dry pasta, semolina, couscous and Panzani sauce business to CVC Partners VIII for an amount of 550 million euros, as reported by the company this Monday to the National Securities Market Commission (CNMV) . The operation, which the group expects to close before the end of the year, will generate a gross capital gain of 91 million euros.
The CVC Partners fund made a binding offer to Ebro Foods. And the latter has given it exclusivity in relation to said operation, the sale of which has already been valued for months. The transaction is now subject to information and consultation of the representatives of the workers in France, to the obtaining of the regulatory authorizations and the approval by the general meeting of shareholders of the company.
“Ebro Foods, SA has received a binding offer from CVC Capital Partners VIII and has decided to grant that entity exclusivity in relation to the sale of the dry pasta, semolina, couscous and Panzani sauces business,” explains the note issued by the firm. The operation would materialize through the sale of 100% of the capital stock of Panzani, a French brand that it bought in 2005 for 639 million (302 million were debt).
In this case, Panzani develops other businesses that are not the object of the transaction (fresh pasta and rice). Therefore, before making the sale, Ebro Foods will exclude those businesses that would fall under the group’s umbrella. “The business object of the transaction includes the Panzani, Ferrero, Regia, Zakia and Le Renard brands, the Vitrolles, La Montre and Nanterre plants and the Gennevilliers, St. Just and“ Littoral ”mills, and employs approximately 750 workers ”, The company details in the statement.
The business that will pass into the hands of CVC Partners had net sales of 470 million euros in 2020 and an adjusted operating result (before amortization, depreciation and non-recurring) of 57 million euros. With these data, the valuation of the operation reaches 550 million euros (value of 100% of the business, that is, before any eventual adjustment for debt and working capital).
Once approved by the general meeting of shareholders and received the approval of the authorities, the sale will be carried out before December 31, 2021. “This transaction would allow Ebro to continue concentrating its resources on strengthening its businesses premium, fresh and convenience, in which it is a world leader ”, says the group.
In March, the French newspaper Les Echos reported that the Lustucru company and the British CVC fund had teamed up to launch an offer for Panzani. And Ebro Foods already sold part of its business in the United States and Canada at the end of last year, a year that closed with a turnover of more than 3,200 million euros and a profit of 192 million.
The company, for the next two years, has set a roadmap that does not include major acquisitions and is primarily based on innovation. Hence the investment of 60 million euros in the Rinconada plant, in Seville, for state-of-the-art products, and the updating of the group’s plants, where it allocates more than 150 million annually, according to the president of Ebro Foods , Antonio Hernández Callejas, to EL PAÍS in December 2020.
The food company that owns brands such as Arroz SOS made a strong start in the first quarter of 2021 and its net profit grew by 11%, raising its profitability to 52.8 million euros. Some positive figures despite the reduction in sales in the period (-6.7%). This is explained by the comparison with the first quarter of 2020, which was marked by harsh confinement in Spain and other markets in which it operates, which triggered food sales, especially staples such as rice and pasta.