DBAG wants to make more M&A after buying burger supplier Abbelen and ready meals firm Oscar Mayer

DBAG wants to make more M&A after buying burger supplier Abbelen and ready meals firm Oscar Mayer

Deutsche Beteiligungs, the Germany-based private-equity firm, has set out its plan to create "a European market leader" in chilled convenience products after acquiring local private-label supplier Abbelen and UK own-label business Oscar Mayer.

The buy-out house has set up a holding company to run the two businesses, both of which it wants to "internationalise". The private-equity firm, also known as DBAG, said it would look to make more acquisitions to add to its new entity.

"Creating a European market leader with leading national providers of fresh convenience food products is, in our opinion, an attractive entrepreneurial approach," Dr Rolf Scheffels, a member of the DBAG board of management, said. "The market for ready meals and snacks is rarely cyclical and is constantly growing at a high rate, and private labels are benefiting particularly strongly. We are investing in a very attractive segment of the food market."

Under the terms of the two transactions, DBAG will own around 90% of the new management holding company housing burgers and meatballs supplier Abbelen and prepared meals firm Oscar Mayer, both of which are family-owned. The two managers of the holding company - Helmut Morent and Francois Legrain - and unnamed senior executives of the companies will hold the remaining shares.

The new holding company wants to buy more businesses "that both complement the product portfolio and offer products which are also marketable in multiple markets", DBAG said.

Abbelen, which generates annual revenues of EUR140m (US$149.3m), is the largest private-label manufacturer of meatballs and ready-made burgers in Germany, DBAG said. The company supplies supermarket and discounter chains in Germany and neighbouring countries. Its major competitors are either considerably smaller or less focused on the private-label sector. "We were highly successful with our products in Germany in the past years – stronger internationalisation is now the right next step for the company," said Klaus Abbelen, who will step down from the management of the family company subsequent to the transaction.

Oscar Mayer makes chilled prepared meals for UK retailers including Tesco, Sainsbury's, Asda and Morrisons. In its 2015/2016 financial year, the company generated revenues of GBP253m (US$315.9m). "We found the right partner in DBAG to successfully continue Oscar Mayer's development jointly with the management," said John Bigwood, whose family will now be selling its shares.