Financing facility for Vion

The client
Originally founded in the Netherlands, Vion Food Group is now an international food company and one of Europe’s largest fresh meat producers and meat processing companies. Annual sales amount to EUR 5 billion and the company employs almost 12,000 employees in 2014. The company is also an industry leader in the fields of sustainability, product quality and animal welfare. Vion believes in transparency and regularly publishes inspection results and audit reports, leading the way in the sector. The company was declared the best meat company in Germany in 2014 and market leader in the field of animal welfare. Vion Food Group supplies client-specific products and innovative concepts to retail, industrial and food service clients in its home markets of Germany and the Netherlands, but is largely focused on exports to other markets in Europe and the rest of the world.

Vion is a privately-held company with one indirect shareholder, NCB Ontwikkeling. NCB is closely affiliated with ZLTO, an association of agricultural entrepreneurs in the southern part of the Netherlands.

The case
Vion has faced obstacles over the past few years, including a period of financial distress. In 2012, Vion decided to make significant strategic changes. As a result the following two years saw the divestment of Vion’s UK operations, far-reaching operational improvements and in 2014 the sale of Vion Ingredients. These divestments resulted in significant cash proceeds, which Vion used to repay all of its bank debt. What remained was a relatively small working capital facility provided by a syndicate of three banks. Thanks to the focus on its meat processing businesses in Germany and the Netherlands, Vion was both leaner and fitter and ready to face the future with confidence.

Meanwhile, with its sights set firmly on a profitable future, Vion was looking for a more flexible working capital facility.

The solution
Throughout this entire process NIBC, which was one of Vion’s lenders until 2007, had been in close contact with Vion’s management at both executive board and supervisory board level. Our continued dialogue with management had convinced us that Vion was back on track and confirmed our confidence in improving financial performance. We backed up our confidence in the new strategy by committing EUR 50 million to partly finance Vion’s working capital requirements. Additionally, ABN AMRO Commercial Finance also committed EUR 50 million. The combination of these commitments resulted in a EUR 100 million senior secured working capital facility which refinanced Vion’s previous facility. In July 2015, the new facility was increased to EUR 125 million when Bank of America Merrill Lynch joined the syndicate, rebalancing commitments to EUR 45 million from ABN AMRO Commercial Finance, EUR 40 million from Bank of America Merrill Lynch and EUR 40 million from NIBC.

This EUR 125 million facility gives the food group the financial flexibility it needs to move forward. Vion is now well positioned for the future and has the financial flexibility it needs to move ahead with its plans.

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