Silverfleet Capital acquires Kalle

In one of the largest private equity deals agreed so far this year, European buy-out firm Silverfleet Capital has acquired Kalle, a manufacturer of sausage casings, for €212.5 million (£183 million).

This is the first deal from Silverfleet’s new fund of €665 million, the remainder of which is to be invested in new transactions over the next three years. Debt for the transaction was secured from a syndicate of banks led by Bank of Ireland.

Guido May, a partner at Silverfleet Capital, says, ‘The recession-proof nature of the food sector has made it possible for us to secure new debt, with the banks more willing to finance leveraged buy-outs in this industry.’

Silverfleet plans to grow Kalle through a buy-and-build strategy and has already identified several acquisition targets, according to managing partner Neil MacDougall.

The vendor is Montagu Private Equity, which backed a secondary buy-out of Germany-based Kalle in 2004.

The company makes artificial sausage casings and sponge cloths and was founded in 1863. It operated as a division of the Hoechst Group from 1924 to 1995, and was sold to CVC Capital Partners Europe in 1997.

The market for sausage casings has grown at 3.1 per cent per annum for the past five years, and that growth is expected to accelerate over the next four years, according to Silverfleet.