Riverside, a generalist fund, is not specifically interested in food, which has a tendency to be more resilient in recession since eating is a basic human necessity. Other food sector companies in its portfolio are US-based HerbThyme (acquired April 2008), Greenline Foods (September 2006), and Maverick wine closures (September 2004).
But a spokesperson for the company told FoodNavigator.com that Kaul that Kaul is considered a “hidden champion”, and has been doing well even in the tough economic environment. The firm was attracted by Kaul’s niche business; it is not interested in businesses with a concentration of customers.
Kaul, which is based in Elmshorn and has a subsidiary in the UK, makes glazing, polishing and antisticking agents for the food and pharmaceutical industries. Its flagship brands are Capol, Caplan, Capolex and Fix Gum. It was privately owned prior to the acquisition.
The value of the buy-out as not been disclosed, but as German deals are ranked in clusters it is known to have been under €50m.
Speaking for Riverside and not for private equity as a whole, the spokesperson said that the acquisition was attractive because Kaul is a niche, non-commodity business that does not have a high concentration of customers. It is not attracted by firms that do 80 per cent of their business with just five customers.
This year has seen a spate of ‘distress deals’ in the market at large, with struggling businesses being prime targets for acquisition by those with cash to hand. But Riverside, for its part, has a policy of acquiring only companies that have seen growth for the last three years.
For Kaul, the plan is to retain and speed that growth momentum, especially in international markets.