Danube to be acquired by Mid Europa Partners - sources Proprietary Intelligence

Merger Market
by Maryna Irkliyenko in London and Katka Krosnar in Prague

Danube Foods Group (DFG), the Serbian food conglomerate, is being acquired by Mid Europa Partners, two sources said.

The deal is due to be announced early tomorrow (3 February), the first source said. An announcement had been planned at the end of this week but has been brought forward due to local market chatter, he added. A binding agreement has been signed but the transaction is subject to customary closing conditions, and is expected to be completed in 1H15, the first source said.

Mid Europa Partners was advised by UniCredit and White & Case.

Mid Europa will acquire a majority stake in DFG which includes Serbia’s largest dairy Imlek [BELEX:IMLK], biscuit maker Bambi Banat [BELEX:BMBI] and mineral water and other non-alcoholic beverage company Knjaz Milos. Given that two of DFG’s subsidiaries are listed, the deal will be a two-stage transaction. Mid Europa will announce a voluntary tender for the minority stake in Imlek, which in turn owns the KM and Bambi businesses, the second source said. After the voluntary tender for Imlek minorities is completed, VDF’s full stake in Imlek will be acquired under the SPA (sales and purchase agreement), the source added.

The DFG sale is being managed by Krys Global, an independent liquidator of Value Discovery Fund, the owner of Danube Foods. Krys Global was appointed after Salford Capital Partners’ mandate to manage Value Discovery Fund expired in mid-2012.

The deal values the target’s assets at cEUR 630m, the second source said. DFG had revenues of more than EUR 400m in 2014.

Mergermarket reported in November that Mid Europa and Searchlight were in talks to acquire DFG and that Duff & Phelps had been mandated as sell-side advisers.

Searchlight had been involved in earlier talks but later dropped out, the sources said.

Mid Europa and DFG declined to comment.