With their sale of United Malt Holdings for $655 million, Castle Harlan was able to realize a respectable profit, approximately 4 and a half times the money invested.
Castle Harlan and Champ Private Equity, an Australian affiliate company with Castle Harlan, sold the portfolio company, the world’s fourth largest producer of malt, to GrainCorp of Australia.
In 2006 the partners invested in total $90.54 million in equity in United Malt, which was purchased at the time from Conagra Foods and Tiger Brands. Castle Harlan supplied 55 percent of the investment, while Champ supplied the remaining percentage.
The internal rate of return was about 80 percent, but it would be incorrect to believe that the deal was risk free. Earlier tries to see United Malt ended unsuccessfully, according to BusinessWeek.