Archive for the ‘CSM’ Category

CSM NV (CSM) agreed to sell its bakery supplies unit to Rhone Capital LLC for 1.05 billion euros ($1.36 billion) including debt, ending a 10-month search for a buyer as it seeks to focus on bio-based ingredients.

The net cash proceeds will be about 850 million euros, with the remainder coming from pension liabilities being transferred with the business, Diemen, Netherlands-based CSM said today.

CSM Chief Executive Officer GGerard Hoetmer said, “We are certain that we can distribute some of the proceeds to shareholders.” Source: CSM NV via Bloombergectations,” said Richard Withagen, an analyst at SNS Securities in Amsterdam, who rates CSM a buy and expects some of the proceeds to be returned to investors. With CSM’s focus on its remaining divisions “it’s a completely new chapter in the business.”

The unit that sells bakery ingredients and ready-made goods was put up for sale in May as CSM seeks to concentrate on its Purac and Caravan ingredients businesses. The division has been up against declining volume as consumers switch from buying bread at artisan bakeries in favor of shopping at supermarkets.

“We are certain that we can distribute some of the proceeds to shareholders,” CSM Chief Executive Officer Gerard Hoetmer said on a conference call with analysts today. No decision has been made on how much will be returned or on whether a share buyback or dividend will be used, he said.

The shares rose as much as 8.4 percent in Amsterdam, the steepest intraday gain since May 7. They were up 4.8 percent at 17.25 euros as of 3:15 p.m., giving the company a market value of 1.26 billion euros.

‘Essential Step’

The sale “is a milestone in the development of the company and an essential step towards our goal of transforming into a leading supplier of innovative bio-based ingredients and solutions,” Hoetmer said in a statement. The sale should be completed in the third quarter.

Most of the company’s future investments will go into the biotechnology trend, Hoetmer told analysts.

CSM decided to divest the unit almost a year ago because it didn’t have the financial capital to develop both businesses, it said at the time. CSM’s Purac business posted sales growth of 2.4 percent in 2012, led by demand from Asia.

CSM, which says it is the biggest provider of bakery ingredients, wrote down the value of the European business earlier this month by 165 million euros. The business makes products such as ingredients and ready-made products for bakeries, food-service outlets, restaurants and supermarkets.

Rhone Purchases

Rhone, a New York-based buyout firm, has more than 3 billion euros under management and focuses on companies with a European or transatlantic presence. It bought the carbon-black unit of German chemical maker Evonik Industries AG for more than 900 million euros in 2011.

Morgan Stanley and PricewaterhouseCoopers Corporate Finance were joint advisers to the buyers on the CSM sale. Rothschild and Rabobank acted for the Dutch company.

The businesses being sold had sales of 2.56 billion euros in 2012 and earnings before interest, taxes and amortization, excluding one-time items, of 106.8 million euros. The sale excludes Caravan ingredients and includes the CSM brand name.

CSM will have one-time costs of 10 million euros to 15 million euros related to the divestment of the bakery business in 2013 and doesn’t expect further costs at a corporate level, Chief Financial Officer Nicolaas Kramer told analysts today.

The company will make an announcement on the renaming and rebranding of the company “in due course,” the CEO said.


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