Information on the Target

Gilde Equity Management Benelux is pleased to announce the completion of its acquisition of Pré Pain & Smithuis from former shareholder Neon Private Equity (ABN AMRO and former Fortis Private Equity). Smithuis was established in 1889 by the Smithuis family as a traditional bakery. Over the first century of its operation, the business evolved into a fully automated industrial bakery. In 1992, Pré Pain was founded as a pioneer in the Dutch bake-off market, positioning itself as a leading niche player in the internationally expanding segment of small crusty bread rolls.

Pré Pain produces approximately 100,000 tons of bread annually, employing a best-in-class production facility renowned for its quality, efficiency, and flexibility. The company has maintained strong and lasting relationships with key retailers in the Netherlands and several prestigious international clients. Despite the company's previous success, it has faced challenges in meeting the strong demand from its customers, necessitating an expansion of its production capacity and efficiency. To build on its unique market position, Pré Pain seeks to invest in further international growth in collaboration with its management team.

Industry Overview in the Target’s Country

The Dutch baked goods industry has witnessed substantial growth in recent years, driven by changes in consumer preferences that favor convenience and quality. With a rising trend in on-the-go meals, the demand for baked products such as rolls, croissants, and other pastries has significantly increased. This shift has encouraged companies like Pré Pain to innovate their offerings and invest in improved production technologies.

Moreover, the sector has become increasingly competitive, with both traditional bakeries and industrial producers striving to differentiate themselves. As health-consciousness among consumers rises, there is a growing emphasis on quality ingredients and artisanal baking methods, influencing production practices across the industry.

In addition, the emergence of the bake-off market has created new opportunities for growth. This segment, which focuses on products that can be baked fresh in-store, has gained popularity in supermarkets and convenience stores, positioning companies like Pré Pain advantageously to capitalize on this trend.

With ongoing technological advancements and shifts in consumer behavior, the future of the Dutch baked goods industry appears promising. Businesses that adapt to these changes through innovation and strategic partnerships will likely see significant growth potential in the coming years.

The Rationale Behind the Deal

The acquisition of Pré Pain & Smithuis aligns with Gilde Equity Management's strategy to invest in mid-sized companies with strong growth potential. By partnering with Pré Pain, Gilde aims to leverage its industry expertise and financial resources to expand the company’s production capacity and enhance operational efficiency.

This collaboration is expected to facilitate Pré Pain's ambitious plans for international expansion, allowing it to better meet the growing demand for its high-quality bread products both domestically and abroad. By investing in advanced production technologies and infrastructure, Gilde and the management team can work together to solidify Pré Pain's market position further.

Information About the Investor

Gilde Equity Management Benelux is an independent investment company that focuses on management buy-outs of medium-sized enterprises in the Benelux region, managing assets worth EUR 500 million. The firm has a proven track record of successful investments across various industries, including market leaders like Salad Signature, HG International, and Actief Interim.

Gilde's expertise in supporting management teams and driving operational improvements makes it well-equipped to foster growth in its portfolio companies. Through strategic investments and active management involvement, Gilde aims to unlock the potential of the businesses it invests in, ensuring a sustainable and profitable future.

View of Dealert

The acquisition of Pré Pain & Smithuis by Gilde Equity Management is a strategically sound investment, given the favorable trends in the Dutch baked goods industry. The company's established reputation, combined with its potential for international expansion, presents an excellent opportunity for growth. Gilde's involvement is likely to enhance Pré Pain's operational capabilities, enabling it to meet increasing consumer demands effectively.

Furthermore, the ongoing shift towards bake-off products and the rising popularity of convenience foods support the rationale for this investment. As consumers continue to seek high-quality, convenient baked goods, Pré Pain is well-positioned to capitalize on this trend, particularly with Gilde’s backing.

Overall, if managed correctly, this deal could yield substantial returns for Gilde and contribute significantly to Pré Pain's growth trajectory. The investment reflects a deep understanding of the market dynamics and an opportunity to leverage innovative manufacturing practices while enhancing overall efficiencies.

In conclusion, this transaction stands out as a favorable investment venture, fostering a collaborative approach to drive both production and market expansion, which ultimately bodes well for Pré Pain's future.

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