maconda assesses synergy potential in a merger of leading German manufacturers of frozen convenience food
Following the acquisition of Eichkamp at the beginning of 2014, VR Equitypartner together with the private investor Harald Sipple and the German Opportunity AB continues its buy & build strategy in the convenience food sector with the acquisition of Karl Kemper. The company, headquartered in Borken, Germany, is a leading supplier of frozen convenience food for the growing out-of-home market. Both companies supply traditional German meals and meal components with a growing share of vegetarian food. The main customer group of Karl Kemper is food service (hotels, restaurants, cafeterias and canteens) supplied via wholesalers and cash & carry stores. Karl Kemper, founded in 1975, generates sales of approximately € 30 million and employs about 170 people.
Eichkamp is also a leading supplier of frozen convenience food and is focusing strongly on the industrial customers, discounters and large food retail chains. Eichkamp and Karl Kemper will merge to form the European Convenience Food GmbH, generating sales of about € 65 million. The former managing partners of both companies will remain operationally responsible and also stay shareholders in the merged entity.
As a highly experienced advisor in consumer goods and food & beverage, including the frozen food segment in particular, maconda was retained to conduct a detailed analysis of the synergies stemming from the merger of the two companies as well as to assess the potential to form a strong domestic player with a pan-European reach. Integral part of the engagement was a detailed mapping of synergies, costs and timing in the areas of product development, purchasing, production, sales and logistics. Resulting estimates of the earnings level impact of the recurring revenue and cost synergies as well as the necessary one-off expenditures served as key input for valuation and deal terms negotiation. As an obligatory part of the analysis, maconda also conducted an in-depth review of the market and competitive landscape in the frozen food industry as well as a detailed description of the underlying value chain.
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