British dairy foods company Dairy Crest Group Plc (LON:DCG) said today that after receiving certain permissions it had sealed a binding deal for the sale of its French branded spreads unit St Hubert SAS to an entity owned by private equity firm Montagu Private Equity SAS.
On 29 June, Dairy Crest announced that the buyout firm had offered to acquire the particular business for EUR430m (USD523.2m) in cash through its newly-established company Brassica Acquisition SAS. At that time, the vendor noted that a conditional agreement on the matter was expected to be signed once a consultation with the French Works Council is completed.
Today, Dairy Crest said that this process had been concluded and that it had also received lender consent, which was another condition to finalising the transaction. The divestment, however, is still subject to stockholder and regulatory clearance.
Previously, the British company indicated it would use the sale proceeds to cut net debt and continue growing its domestic branded foods activities as well as to restore profitability at its dairies business in the medium term.
St Hubert ranks second in the French spreads market with a 39% share by value as at March 2012. It generated EBITDA of EUR48.1m and EBIT of EUR46.1m in the year to 31 March 2012, with gross assets of EUR169m at that date. Dairy Crest bought the business in January 2007 for EUR370m.