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Katjes International seeks further acquisitions based on carve-outs from large corporates

Katjes International, part of Germany-based food and personal care Katjes Group, is seeking further acquisitions based on carve-outs from large corporates, CFO Stephan Milde told Mergermarket.

The company purchased an oral care business from Henkel [HEN3:ETR] in December last year. Although financial terms were undisclosed, the acquired brands generated net sales of more than EUR 50m, as reported

With a revenue guidance of EUR 325m to EUR 350m for this year, Katjes International is primarily seeking to self-fund future deals, but it “would not exclude” working alongside an investor, either strategic or financial, Milde said, without elaborating.

Katjes International sees itself as a specialist in buying businesses that have been carved out from multinational and large corporates, Milde said. These assets have often become too small or been deprioritised over time, he said on the sidelines of ISM sweets and snacks fair in Germany last week. 

The company has had a positive experience in the past, Milde said. This includes feedback from vendors, who were seeking a reliable and responsible owner that would look after its employees after the sale, he added. 

Prior to acquiring oral care business with brands like Vademecum, Theramed, Licor del Polo and Antic Erboristeria from Henkel, Katjes International bought a Germany-based Bübchen, a baby and kids care brand from a large pharmaceutical company Galderma, formerly Nestle Skin Health, he said.

Katjes International is looking to acquire fast-moving consumer goods (FMCG) businesses complementary to its confectionery and body care segments, the CFO said. It is primarily interested in branded businesses with a mass market distribution to large retail chains, grocery, or drug stores, Milde said. The company could also consider acquiring a business with a private label if a branded business is its larger part, he said.

The company is also interested in acquiring independent brands, non-carve outs, with the same features, the CFO said. It wouldn’t buy a pure direct-to-consumer (D2C) online business, he added. 

When it comes to regions, brands with distribution in large European markets, including the UK, Germany, France, Spain, Italy, and Poland, are attractive, he said. It is flexible on a deal structure, but would prefer a minority stake in a target, the CFO said.

Katjes International does not have a cap on size criteria, he said, adding that carve-outs wouldn’t be very large of some EUR 1bn or very small under EUR 5m turnover. It has an internal M&A team and it is always in touch with various bankers and advisors, Milde said.

Started in 1950 as a family business, the privately held Katjes Group consists of Katjes Germany, Katjes international and Katjes Greenfood. The latter announced an acquisition of a 10.1% stake in mymuesli, Germany’s leading customised organic muesli manufacturer, yesterday. Katjes Greenfood is run by another CFO and focuses on food categories outside of confectionery, Milde said.

Katjes International, which has some 1,000 employees, “usually” keeps brands rather than selling them, Milde said.

by Gabriele Rutkauskaite in London