Deutsche Beteiligungs AG invests in European group for convenience food

• Market leader in chilled ready meals and snacks for private-label brands of large grocery chains
• Acquisition of Abbelen GmbH and Oscar Mayer Ltd. via joint management holding company
• Management buyout arrange succession for two family-owned businesses
• Product innovations and internationalisation to drive growth

Frankfurt am Main, 5 April 2017. Based on two parallel acquisitions, Deutsche Beteiligungs AG (DBAG) will establish a European market leader for chilled convenience products, particularly fresh ready meals and snacks, the Company announced today. To that end, DBAG Fund VII will acquire the interests in Abbelen GmbH (Abbelen) and Oscar Mayer Limited (Oscar Mayer) via a management holding company.

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 holds a leadership position in the United Kingdom for ready meals and snacks delivered to large grocery retailers and discounters. The two companies will continue to be run autonomously, but will now operate under the umbrella of a joint management holding company. The objective is to further build the companies’ product range and internationalise the group’s distribution activities more strongly, to which add-on acquisitions will also contribute. The concept will be implemented by Helmut Morent and Francois Legrain, two managers with many years of international managerial experience in this sector. Jointly with the two managers, DBAG conducted an in-depth analysis of trends and potential target companies in this growth market; together they also sourced the two initial transactions. DBAG advises DBAG Fund VII and is a co-investor in the fund.

Abbelen and Oscar Mayer have been family-owned until now. The management buyout thus also settles the succession issue at these companies. DBAG Fund VII will hold about 90 percent of the interests in the management holding company. The two managers of the holding and senior executives of the group companies will hold the remaining shares.

The management holding aims to make add-on acquisitions that both complement the product portfolio and offer products which are also marketable in multiple markets. An increase in group revenues to more than 500 million euros is targeted. To finance the transaction, the top-up fund of DBAG Fund VII will be used, which enables equity capital investments of up to 200 million euros for a single transaction. Initially, about 80 million euros in equity will be invested for the management holding’s first two acquisitions, of which some 15 million euros will come from DBAG. DBAG will then hold 16 percent of the management holding.

Abbelen (www.abbelen.de), with revenues of 140 million euros, is the largest private-label manufacturer of meatballs and ready-made burgers in Germany. The company produces convenience meat products in its state-of-the-art meat processing factory in Tönisvorst (North Rhine-Westphalia) and supplies all large supermarket and discounter chains in Germany and bordering countries. Its major competitors are either considerably smaller or less focused on the private-label sector. More than half of all meatballs or burgers produced in Germany for the private labels sold by supermarket and discounter chains come from Abbelen. “We were highly successful with our products in Germany in the 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 subsequent to the transaction.

Oscar Mayer (www.oscarmayer.co.uk) is the leading producer of chilled prepared meals in the United Kingdom, the most significant and most innovative market by far for these products in Europe. 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 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 pounds (293 million euros at current rates). “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.

“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, 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 benefiting particularly strongly. We are investing in a very attractive segment of the food market.” In addition to the market growth, new innovative products and stronger internationalisation of activities that have largely focused on the domestic markets until now are to contribute towards the group’s expansive development.

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.