PAI exits from French ingredients on Diana sale

- Last updated on GMT

French natural ingredients firm Diana-Ingredients will shift from
one equity investor to another with confirmation yesterday that its
owner, a BNP Paribas holding company managed by PAI Partners, will
spin the company off to London-based Electra Partners Europe in a
leveraged buy-out worth €270m, writes Lindsey Partos.

The acquisition marks continued interest from the private equity market in the stable, but fragmented, European food sector. The new owner Electra is banking on Diana-Ingredients continuing to grow in markets with high added value.

"We are very pleased to invest in Diana, which holds leading positions in high-growth niche markets. The management team is of very high quality and the prospects are extremely positive,"​ said Jean Ducroux, managing director of Electra Partners Europe in Paris.

The Vannes-based natural ingredients firm that had a turnover of €161m operates in two major sectors, natural vegetable and animal-based extracts through the companies Diana Végétal and SPI, making up 43 per cent of revenues. Palatability enhancers for pet food through the SPF company represent 33 per cent of sales revenues.

The French firm has also developed two other businesses : culinary products used for the creation of traditional sauces and flavourings, that holds 13 per cent of sales revenues, and with 11 per cent of revenues, the manufacturing of amino acids through the BCF company.

According to Electra, under the management team led by Olivier Suquet, and capitalising on 'its extensive experience in the ingredients sector,' Diana Ingrédients has grown rapidly, particularly internationally.

"The company's strong growth is due to its excellent commercial positioning in fast-expanding markets, as well as its high capacity for innovation, which has resulted in the continual development of its product portfolio,"​ added the London-based equity house.

Electra Partners Europe has completed 82 buy-outs in the past 15 years and appears to have a particular interest in the European mid-cap market, investing in companies valued at up to €400m.

PAI, that acquired Diana-Ingredients in 1990, has been looking to consolidate its position in the food sector over the past four years with a host of acquisitons that included the French dairy products company Yoplait, UK biscuits manufacturer United Biscuits for €2.8bn, and for €555m Panzani Lustucru, a pasta sauce specialist. Diana-Ingredients was the only human food ingredients firm in the group's portfolio although in November 2002 the firm bought a 74 per cent slice in animal feed giant Provimi.

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