Three Firms Feast on $2.2 Billion Food Recycling Deal
Topping the bids of several private equity firms in an auction for the unit, food recycler Darling International said Monday it has agreed to pay roughly $2.2 billion in cash to acquire the specialty ingredients division of Dutch food company Vion Food Group.
Irving, Texas–based Darling beat out such rival bidders as Advent, CVC, and Permira on the way to striking its deal to land Vion Ingredients, a rendering division that uses slaughterhouse byproducts to make gelatin, proteins, and fats sold to companies in the cosmetics, energy, food, and pharmaceutical industries. The unit—whose products can end up in any number of items, including biofuels, pet food, sausage casings, and even candy (like gummy bears)—was put up for sale by parent company Vion Food Group in April in an attempt to reduce debt.
Darling is the U.S.'s largest supplier of recycled food products, repurposing meat byproducts and bakery waste as well as used cooking oils and grease for a variety of products. Darling said the addition of Vion Ingredients would expand the company's geographic reach and product lines.
The deal is expected to close in January 2014, pending regulatory approval in the Netherlands, at which point Vion Ingredients CEO Dirk Kloosterboer will join Darling's board and be named COO of the company.
Darling has turned to attorneys at K&L Gates and Clifford Chance for legal advice on the purchase. The K&L Gates team is led by Dallas-based M&A partners Mary Korby and David Luther. Dallas employee benefits partner Erin Turley, Orange County tax partner Greg Hartker, London competition partner Scott Megregian, and Brussels regulatory partner Patrice Corbiau are also advising. In Frankfurt, partners Rainer Schmitt and Mathias Schulze Steinem are advising on German tax and corporate matters, respectively. Sydney corporate partner Edward Nixey is advising on Australian matters, while Boston-based corporate partner Alejandro Fiuza is handling South American matters. Beijing-based associate Yingying Tao is also working on the deal.
In August, K&L Gates advised Darling on its $625 million purchase of the animal byproducts division of Maple Leaf Foods.
Clifford Chance is advising Darling on Dutch aspects of the deal with an Amsterdam-based team led by M&A partner Gregory Crookes. Banking partners Jelle Hofland and Titus de Vries are also working on the deal along with employment law counsel Sara Schermerhorn. Also on the deal for Clifford Chance are associates Tijmen Bongartz, Floor van der Steenstraten, and Nienke van Stekelenburgh as well as attorneys Laura Lopez de Vries and Michiel Boer. Darling's general counsel is John Sterling.
(Simpson Thacher & Bartlett corporate partners Lee Meyerson and Robert Spatt are representing J.P. Morgan Securities in its role as financial adviser to Darling.)
Dutch firm De Brauw Blackstone Westbroek, meanwhile, is representing Vion Food Group in connection with the Vion Ingredients sale. Corporate partner Arne Grimme is leading a team from the firm that also includes finance partners Menno Stoffer and Ernest Meyer Swantée as well as corporate partner Jaap Winter, litigation partner Berto Winters, competition partner Jaap de Keijzer, and employment partner Barbara van Duren-Kloppert.