Sweet end for Gilde and AXA

Gilde Investment Management and AXA Private Equity have exited their 1998 investment in Continental Sweets. The exit opportunity was driven by the consolidation that is currently taking place in the global confectionery sector.

CSM, which is an international group of companies that develops, manufactures, sells and distributes food products and ingredients, has paid 4.437 billion Belgian francs (o110 million) for the Continental Sweets business. CSM is paying the Gilde Buyout Fund and AXA Private Equity cash for Continental Sweets and the acquisition will be backdated to May 28 this year. The goodwill on the deal amounts to o75 million and will be charge to capital and reserves. CSM has said that it expects to achieve annual synergy benefits on the acquisition of o3 million to o4 million within two years.

Gilde Buyout fund and AXA Private Equity acquired Continental Sweets in May 1998 when it was a unit of the Campbell Soup Company. The terms of this acquisition have not been disclosed except that Lazards acted for Campbell Soup and Berenberg Bank for the investors.

Continental Sweets produces a large assortment of sugar confectionery (among others jellies, chewy candy, hardboiled candy, chocolate products and bubble gum) in two factories in Belgium and France. The company’s main activities are in Belgium and France, where it markets its principal brands Lutti (hard boiled sweets, jellies, toffees and chocolate products) and Leo (jellies, bubble gum and lollies). In addition, Continental Sweets has sales offices in the Netherlands, Belgium and the UK where it also acts as a distributor for several important third parties. All these activities mean Continental Sweets has approximately 870 employees.

Continental Sweets has an annual turnover of around o100 million. Broken down this splits between jellies (53 per cent), hard boiled sweets (32 per cent), chocolate products (13 per cent), and bubble gum (two per cent). France accounts for 42 per cent of the turnover, with 18 per cent in Belgium, 16 per cent in the Netherlands and the remaining 24 per cent in the UK and other European countries.

CSM (formerly known as Centrale Suiker Maatschappij) is on the acquisition trail to become the leader in European sugar confectionery. It places itself in the number two position following the acquisitions of Malaco from Freia Marabou, a unit of Kraft Jacobs Suchard, itself a unit of Philip Morris Kraft General Foods, in June 1996 and of Leaf last year.