Target Information

The Cerea Mezzanine III Fund has completed its second investment by facilitating the merger of Europe Snacks, a company it has supported since 2006, with the UK-based Kolak Snacks Food Group. Founded in 1991, Europe Snacks is recognized as the leader in France for the production of private-label savory snacks. The company specializes in the manufacture of innovative products, such as wafers, crackers, and extruded snacks, and has embarked on an international expansion journey. With a strong emphasis on innovation, high-quality production facilities, and a proactive commercial strategy, Europe Snacks has experienced consistent organic growth, achieving a 12% annual increase in revenue from 2010 to 2015.

Industry Overview in France

The savory snack industry in France has witnessed significant evolution over the past few years, marked by escalating consumer demand for diverse snack options. Private-label brands have carved out substantial market share, appealing to budget-conscious consumers while offering high-quality alternatives to branded products. The trend towards healthier snacking options has also influenced product development, leading companies to invest in creating artisan and innovative snacks that meet the evolving preferences of consumers.

Furthermore, the increasing popularity of on-the-go and convenience snacks reflects lifestyle changes, with many consumers seeking quick yet satisfying options. This dynamic has driven growth in production capacities, prompting companies to enhance their supply chain efficiencies to better serve retail clients.

As the largest European market for savory snacks, France provides lucrative opportunities for companies looking to expand their footprint. The growing interest in the private-label segment ensures a competitive environment, with brands constantly striving to distinguish themselves through product variety and superior taste.

Rationale Behind the Deal

The merger of Europe Snacks and Kolak Snacks Food is strategically advantageous, as it creates a formidable entity in the private-label savory snack segment. This consolidation is expected to result in a combined annual revenue exceeding €250 million and will enable the new group to leverage economies of scale and enhanced market presence.

Additionally, the merger allows Europe Snacks to penetrate the UK market, which is twice the size of the French market for savory snacks. This move not only opens up new avenues for growth but also allows Europe Snacks to export its expertise in wafers and crackers. Kolak, on the other hand, is poised to capitalize on the synergies that this partnership will foster, particularly in France and neighboring countries.

Investor Information

Cerea Mezzanine III Fund is a prominent player in the European investment landscape, focusing on providing growth financing to mid-sized companies. With a strategic approach to investing, Cerea specializes in supporting businesses through significant transitions and growth phases. The fund has a history of fostering sustainable development and innovation within its portfolio companies, aiming to drive long-term value creation.

By backing the merger of Europe Snacks and Kolak Snacks Food, Cerea Mezzanine III is positioning itself to benefit from the expanding market opportunities within the savory snack sector. The fund’s involvement not only provides the necessary capital for a successful merger but also reflects its commitment to partnering with companies that exhibit strong potential for growth.

View of Dealert

This merger is a strategically sound investment, as it positions both companies to gain significant market share in the competitive landscape of private-label savory snacks. By combining forces, Europe Snacks and Kolak are creating a powerhouse that can effectively compete against established brands while capitalizing on growing consumer trends.

The expansion into the UK market will allow Europe Snacks to utilize its successful product lines in an area with a burgeoning demand for innovative snack options. This move is expected to enhance the overall profitability and market presence of the new entity.

Moreover, the partnership is likely to yield operational synergies that can lower production costs and improve distribution efficiency, thus benefiting both the companies and their stakeholders. The retention of the original management teams ensures continuity in leadership, which is crucial for maintaining company culture and operational stability during the transition.

In conclusion, the merger between Europe Snacks and Kolak Snacks Food appears to be a strategic and well-timed investment that could significantly strengthen their positions within the market and drive sustainable growth in the coming years.

View Original Article