PAI to offload remaining stake in Chr Hansen

French private equity firm PAI Partners has agreed to sell its remaining 25.66% stake in Danish food ingredients company Chr Hansen to Novo for €560m ($715.56m).

Under the agreement, Novo will purchase 35 million shares of common stock of Chr Hansen from Financière Star, a Luxembourg firm controlled by PAI, at a price of DKK117 ($20.03) per share. The transfer of shares is subject to customary regulatory approvals, which the companies expect to obtain during the first quarter of 2012.

Novo CEO Henrik Gürtler said that Chr Hansen is a well-run company and a good fit with the investment strategy, and the company believes that it will prove to be an attractive long-term investment. "We do not intend to take control of Chr Hansen and are excited to support Chr. Hansen as a long-term minority shareholder," Gürtler added.

SEB Enskilda Corporate Finance is acting as sole financial adviser to Novo, while Morgan Stanley is acting as sole financial adviser to PAI / Financière Star on the deal.

PAI Partners, which bought Chr Hansen for DKK8.2bn ($1.4bn) in July 2005, has been gradually reducing its stake in the ingredients company. It sold 25 million shares at DKK90 ($15.41) a share in June 2010 through an initial public offering, raising net proceeds of DKK3.15bn (€423.6m) and reducing its stake from 55.5% to 37.4%. In November 2011, the firm sold 15 million shares, dropping its stake in Chr Hansen to approximately 26%, generating proceeds of DKK1.73bn ($310m). According to PAI Partners, the latest transaction, following its IPO in 2010, will produce a fourfold return on investment.

Chr Hansen produces natural ingredients to the food, beverage, dietary supplements and agricultural industries, and it has the following divisions: cultures and enzymes, health and nutrition and natural colours.

Novo, a Danish private limited liability company, is the majority shareholder of drug company Novo Nordisk and industrial enzymes producer Novozymes.

Caption: PAI Partners, which bought Chr Hansen for DKK8.2bn ($1.4bn) in July 2005, has been gradually reducing its stake in the ingredients company. (Image courtesy of Chr Hansen.)