BC seals a big cheese deal

VENTURE capitalist BC Partners is paying foods giant Danone £619m for Italy's best-known cheese maker, Galbani. In the biggest food-industry leveraged buyout in Italy, BC, which has one of its main bases in London, will take over a host of cheeses including Dolcelatte, Mascapone, Ricotta Finaetta and Bel Paese.

Sources said that Danone will supply BC with a e207m (£126m) loan note, reducing the amount BC has to pay. The headline value of the deal is much less than the near-£1bn price reportedly hoped for by Danone when it started the sale process.

Galbani is respected for the Europe-wide distribution network through which it sells its 300 products. Sales of its cheeses, salamis and cold meats top e1.1bn a year and BC hopes to expand the group further with the trend for natural and convenience foods.

However, its profitability was hit by higher milk prices. Last week, Danone was forced to write down e243m for Galbani's losses in 2001.

BC is expected to continue a restructuring programme already in place at the business, sources said. The venture capitalist is thought to be receiving debt financing from JP Morgan Chase and was advised by Deutsche Bank and Paribas. Lazards advised Danone.