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Barilla Is Evaluating Offers for Kamps Bakeries

Barilla Holding SpA, the world’s biggest pasta maker, is evaluating offers for Kamps GmbH, a network of more than 900 franchise bakery shops, Chairman Guido Barilla said.

barilla

“We are evaluating the sale because it isn’t a strategic business,” Barilla said in an interview in Parma, Italy yesterday. “It is worth a lot and we aren’t interested in giving it away,” he said, adding that none of the offers it received in an auction a year ago “interested” the company.

Barilla has sold assets including La Bella Easo and ice- cream maker GranMilano as it focuses on expanding abroad in bakery supplies. Barilla teamed with Banco Popolare Scrl to buy the Kamps shops and Lieken, the biggest supplier of bread in Germany, in 2002 for 1.8 billion euros ($2.28 billion.) It agreed to buy the bank’s stake in November 2007. Barilla will keep Lieken, the chairman said.

Kamps Bakeries, now a unit of Lieken, has annual revenue of about 200 million euros, according to Barilla. Total sales from the Lieken unit are more than 900 million euros.

Kamps could be worth up to seven times its Ebitda which may be about 10 percent of sales, near the same multiples used for other companies in the food industry, said Daniele Demartis, a fund manager at Rome-based Agora Investments Sgr. That would be as much as 140 million euros.

U.S. Business

Barilla’s earnings before interest, taxes, depreciation and amortization rose 19 percent last year to 527 million euros after businesses in the U.S. started to generate a profit, the executive said. Sales slipped almost 7 percent to 4.2 billion euros after the sale of La Bella Easo baked goods.

Barilla said it doesn’t plan to sell shares in its businesses as the group generates enough cash for expansion.

The Italian company’s U.S. pasta sales rose by almost 12 percent to $500 million last year, when Barilla had a 28 percent share of the market.

“Barilla has probably suffered because most of its sales have been in its domestic market, but financial problems it had are behind it now and, with a very capable management, it iS positioned well for international expansion,” said Demartis.

The Barilla family founded the pasta maker in 1877, sold it to W.R. Grace & Co., an American supplier of construction and container products, in 1971 and bought back a 51 percent stake in 1979. Guido Barilla and his brothers, Paolo and Luca, vice- chairmen, took the reins in 1993 after the death of their father, Pietro.

Source: www.businessweek.com

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