Best bits: private equity dining at M&A table
From frozen food to fromage frais, the last seven days have seen an upturn in talk about M&A in the food industry.
Last Monday's (19 July) news that Unilever had sold its Findus Italy frozen food unit heralded the start of a week in which the future ownership of fromage frais and yoghurt maker Yoplait and of UK snacks giant United Biscuits were the subject of fevered speculation on this side of the Atlantic.
In the US, meanwhile, Sara Lee was said to be considering offloading its North American bread business and, amid all this talk of possible deals, one transaction was struck with the merger of snacks businesses Lance and Snyder's of Hanover.
The wave of M&A news allowed us to demonstrate the strengths of just-food's recent design and content changes, with a series of insight articles analysing Birds Eye Iglo's acquisition of Findus Italy, the merger of Lance and Snyder's and the possible new owners of United Biscuits.
The potential sale of United Biscuits - the owner of brands including McVitie's and McCoy's - has given M&A watchers in the industry food for thought, not least because the speculation is a further sign that private equity groups are once again coming to the fore.
Private equity has largely been conspicuous by its absence in the M&A markets over the last 18 months, but the presence of these funds as both buyer and seller is becoming increasingly prevalent.
Private equity is attracted to the defensive nature of the food industry, which has proved relatively resilient during the recession. The funds are also keen to buy established brands - witness Permira-backed Birds Eye Iglo's acquisition of the Findus business in Italy, as well as the rumoured private-equity interest in MWBrands, which owns brands including John West.
The recent recovery in the markets also means that now is a good time to sell. A private-equity firm like PAI Partners, which is a shareholder in both Yoplait and United Biscuits, could be confident they will at last get a decent price for assets they have held for eight and four years respectively.
Of course, there is some way to go before Yoplait and United Biscuits are put up for auction. PAI told just-food last week that it was "keeping an open mind" about the future of Yoplait and insisted it had not appointed a bank to start the process for a sale.
Amid the speculation about United Biscuits, the company and its two private-equity owners - PAI and Blackstone - have stayed silent, although reports in the UK said last week that the food maker's board had met to approve plans for a sale.
One financial source told us that United Biscuits was likely to be broken up, with the snacks business a prime target for another private-equity owner.
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