Montagu considers Kalle sale

Montagu Private Equity, the European mid-market private equity firm, is understood to have hired investment bank Sal Oppenheim to review its options for German sausage casings manufacturer Kalle Nalo.

Montagu Private Equity declined to comment, but the review could lead to a sale next year.

Montagu has owned Kalle Nalo since 2004, when it purchased the business from rival private equity firm CVC Capital Partners with debt financing from Mizuho Corporate Bank. According to reports, the financing comprised €120m of senior and €20m of mezzanine debt. CVC had acquired the business from German chemicals group Hoechst in 1997.

Wiesbaden-based Kalle produces viscose, plastic and textile-based artificial sausage casings for the meat processing industry. The business also produces sponge cloths. Kalle reported turnover of €167m in 2003. It had 1,250 employees shortly before its acquisition by Montagu.

Private equity has accounted for just US$5.2bn of US$56.9bn of transactions in the global food sector in 2008 to-date. Although the number of private equity deals was only slightly lower in the first 11 months of 2008, dropping from 99 to 81, total transactions were down from US$15.5bn.

Food deals during the year include NBGI Private Equity’s buyout in August of selected assets of Food & Drink Group; Belgian investor GIMV’s takeover of Scana Noliko, a producer of preserved vegetables and fruits, meals, soups and sauces; TPG Capital’s 25% stake in the coffee operations of Israeli food company Strauss Group for US$288m; and Langholm Capital’s MBO of Tyrells Potato Chips in April.