Private equity group BC Partners has agreed the sale of French frozen food firm Picard Surgelés to rival Lion Capital for up to EUR 1.5 billion including debt.
Lion Capital is the owner of the Findus Group, one of the chief frozen food companies in Europe. It also owns the Weetabix cereal and Kettle Chips brands. The group displaced other companies, including CVC Capital Partners, Eurazeo and Bain Capital, to secure exclusive privilege to talks with London-based BC.
It is expected that the deal will be finalised by the fourth quarter. It is subject to approval by European competition authorities, Bloomberg reports.
The news arrived a week after Unilever sold Findus, its Italian frozen foods business, to Birds Eye Iglo, which is jointly owned by private equity groups Lion Capital and Permira. The sale went for EUR 805 million.
Last April, Pinnacle Foods, which is owned by US-based private equity group Blackstone, paid USD 1.3 billion – over nine times its EBITDA – for the US frozen foods unit Birds Eye Foods, reports The Financial Times.
Blackstone and PAI Partners are currently pondering the sale of United Biscuits for about USD 3 billion. Meanwhile, Sara Lee in the US has hired investment banks to sell North American bread, now valued at USD 1.5 billion.
BC Partners, which purchased Picard for EUR 1.3 billion from Candover Partners in 2004, would gain two times its investment on the sale to Lion Capital.
“Despite a hard consumer environment in 2009, Picard continued to gain market share and has further significant growth opportunities in France and in Europe,” said André François- Poncet, managing partner of BC Partners. “We trust that Lion Capital will be a good partner for Picard in the future.”
Picard made sales exceeding EUR 1.1 billon in the year ending on 31 March.
“Throughout the economic cycle, the company has driven consistently strong financial performance,” stated Lyndon Lea, a partner at Lion Capital.
Since the beginning of the year, BC Partners has returned some EUR 2 billion to its investors following the completion of three initial public offerings. In June, investors gave BC an extension to the investment period on its latest fund, signaling that buy-out groups are winning time to organise their USD 500 billion of unspent capital.
Lion Capital is getting financing from Credit Suisse, Morgan Stanley and Citigroup, which establishes banks’ readiness to lend to private equity after a hiatus of two years.
BC Partners is receiving counsel from Rothschild & Cie and Crédit Agricole, while Lion Capital is being counseled by Citigroup.
- Unilever finds buyer for Italian frozen foods business
By Natalia Real