CSM Said Close to Selling Bakery Unit to Rhone Capital

CSM NV (CSM), a Dutch maker of bakery supplies and lactic acids, is close to selling its bakery supplies business to Rhone Capital LLC for about 1 billion euros ($1.3 billion), according to three people familiar with the negotiations.

The sale may be announced as soon as tomorrow, said the people, who declined to be identified because the matter hasn’t been made public. Saskia Nuijten, spokeswoman for CSM, wasn’t available to comment outside usual business hours. A representative for Rhone wasn’t immediately available.

The Diemen, Netherlands-based company put the unit, which sells both bakery ingredients and ready-made goods, up for sale in May to focus on its Purac and Caravan ingredients businesses. CSM has been up against declining volume at the unit as consumers switch away from buying bread at artisan bakeries in favor of shopping at supermarkets.

Sales at CSM’s bakery supplies business rose 7.1 percent to 2.9 billion euros in 2012. Earnings before interest, taxes, depreciation and amortization rose 11 percent to 134.6 million euros. Volume increased at the European bakery supplies unit in the fourth quarter of last year for the first time since 2010.

CSM shares have fallen 7.7 percent since reaching their highest price since 2011 on March 15. The company has a market value of 1.2 billion euros.

The company wrote down the value of the Bakery Supplies Europe unit earlier this month by 165 million euros and said it still expects to divest the business this year.

Rhone, a New York-based buyout firm, has more than 3 billion euros under management. It bought the carbon-black unit of German chemical maker Evonik Industries AG for more than 900 million euros in 2011.

To contact the reporter on this story: Andrew Noel in London at anoel@bloomberg.net

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net; Simon Thiel at sthiel1@bloomberg.net

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