CVC Strategic Opportunities II today signed an agreement to acquire a 50% stake in DFE Pharma (“DFE”), a leading global excipients manufacturer for the pharmaceutical industry. DFE is currently a 50/50 joint venture between dairy companies FrieslandCampina and Fonterra. CVC Strategic Opportunities II will acquire Fonterra’s holding in the business.

Headquartered in Goch, Germany, DFE is a global leading excipient manufacturer. Excipients are the inactive substances that are blended with the active ingredients in medicine for purposes such as binding, bulking, disintegration or to aid in the processing of the active ingredient. With operations in Europe, India and New Zealand and an active presence in over 100 countries, DFE develops, produces and markets excipients primarily for oral solid dose and dry powder inhalation.

Bas van Driel, CEO of DFE Pharma said: “We are excited to be partnering with CVC and look forward to working with them to continue to deliver the best possible solutions to our customers. The combination of FrieslandCampina and CVC as shareholders will provide extra opportunities to excel. CVC’s international network, experience and track record in pharma, as well as support capabilities will be essential in expanding the breadth of our business and exploring potential M&A opportunities.

“On behalf of DFE management, I would like to thank Fonterra for its ownership and, together with FrieslandCampina, for creating DFE in 2006 and allowing it to grow into the world leader in pharma grade lactose excipients, known for its very high quality.”

Kathy Fortmann, President FrieslandCampina Ingredients: “The addition of CVC Capital Partners will facilitate DFE’s growth ambitions over the medium and long term. We thank Fonterra for being constructive partners for the last decade and are confident that the ongoing supply relationship will be mutually beneficial.”

Thierry Bogaert, CVC Industrial Partner said: “DFE supplies mission critical products to the pharma industry. We look forward to the partnership with FrieslandCampina and working with the DFE management team to further enhance and expand the business, providing the full support of the CVC network.”

Jan Reinier Voûte, Co-Head CVC Strategic Opportunities added: “This is the second deal announced from Strategic Opportunities Fund II following its final close in July 2019. The Strategic Opportunities platform invests in high-quality businesses with longer growth horizons and the investment in DFE fits perfectly within this strategy, especially with the joint ownership with FrieslandCampina.”

Fonterra CEO, Miles Hurrell, said: “We would like to thank the DFE management team and our partner FrieslandCampina for the great relationship over the years, which we are pleased will carry on via the ongoing supply of Fonterra’s pharma grade lactose to DFE.”

The transaction is subject to customary regulatory approvals.

Goldman Sachs New Zealand Limited acted as exclusive financial advisor, Russell McVeagh and HVG Law as legal advisors to Fonterra. FrieslandCampina was advised by Allen & Overy, and CVC Capital Partners by Rothschild & Co, Freshfields Bruckhaus Deringer and KPMG.