Target Information

In an exclusive negotiation, Eurazeo, through its Capital1 strategy, is in discussions regarding the divestment of CPK, a leading sugar and chocolate confectionery champion in Europe, to the European holding of the Ferrara Candy Group, a major candy company in the United States. Established in 2017 following the acquisition of 14 brands from Mondelez and the merger with Lamy Lutti in 2018, CPK functions as an independent platform in the sugar and chocolate confectionery sector.

CPK holds a portfolio of iconic brands and is primarily positioned in three market segments: sweets, represented by brands like Carambar, Lutti, Krema, and Michoko; milk chocolate, featuring the British brand Terry’s; and various French chocolate brands, including Poulain and 1848. The company operates three production sites and a workshop in France, employing over 900 staff members.

Industry Overview in France

The confectionery industry in France, particularly the sugar and chocolate segments, has shown resilience and adaptability in recent years. As consumer preferences shift toward premium and innovative products, companies in this sector have been focusing on diversification and quality enhancement. French confectionery brands have a historic reputation for craftsmanship and quality, catering to both domestic and international markets.

In addition to traditional products, there is an increasing demand for healthier alternatives and organic options, prompting manufacturers to innovate while maintaining classic flavors. The rise of e-commerce has also transformed the distribution landscape, allowing confectionery manufacturers to reach broader customer bases and enhance their sales strategies.

Furthermore, economic factors, such as fluctuating raw material prices and changing regulatory environments, pose challenges that companies must navigate. However, initiatives toward sustainability in production processes are becoming integral, with many firms prioritizing eco-friendly practices to meet consumer and regulatory expectations.

Overall, the outlook for the French confectionery market is positive, with opportunities for growth driven by innovation, consumer trends towards premium offerings, and increasing global demand for high-quality confectionery products.

Rationale Behind the Deal

This strategic divestment aligns with Eurazeo's long-term vision of fostering the development of European champions by supporting transformative and responsible practices. The decision to transfer ownership of CPK confirms Eurazeo's capacity to build attractive entities for strategic players in the industry, ensuring substantial value creation for both clients and shareholders.

The sale of CPK represents a significant step for Eurazeo, reinforcing its commitment to executing high-impact investment strategies in the European market while enabling CPK to continue its expansion under new ownership.

Investor Information

Eurazeo is a leading global investment company with a diversified portfolio that focuses on various sectors, including consumer goods, technology, and healthcare. It employs its Capital1 strategy to build strong, competitive leaders within the market, ensuring sustainable growth and strategic positioning.

With a history of successful investments and a solid track record of adding value to its portfolio companies, Eurazeo is dedicated to nurturing companies through their growth phases and enhancing operational efficiencies. The company employs a proactive approach to management, emphasizing collaboration with invested companies to drive innovation and performance.

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This divestment could be seen as a prudent move for Eurazeo, considering their strategy of reallocating resources to maximize returns while capitalizing on market trends. CPK's established presence and brand portfolio make it an attractive acquisition target for Ferrara Candy Group, which stands to benefit from the expanded European footprint.

Moreover, the potential integration of CPK into Ferrara could enable enhanced operational synergies and provide more robust distribution channels, ultimately resulting in accelerated growth. Given the current dynamics, this deal positions CPK favorably within an expanding market aiming for innovation and premium products.

Overall, the deal aligns with Eurazeo’s long-term strategic goals while also reflecting a confident outlook for the confectionery sector in Europe. The anticipated return of approximately €240 million to Eurazeo’s balance sheet highlights the financial viability and success of their investment strategy.

In conclusion, this transaction is likely to affirm Eurazeo's reputation for making sound investment decisions that capitalize on emerging market opportunities. The ongoing monitoring of market dynamics and evolving consumer preferences will be crucial as the parties work towards a successful completion in the fourth quarter of 2025.

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