PAG Private Equity has increased its stake in Food Union Group to become the controlling shareholder in the Latvia ice-cream and dairy maker.

The Hong Kong-based investor first invested in Food Union in 2017, along with local peer Meridian Capital. At the time, the former put in €161.6m ($177.2m today) and the latter contributed €52.4m.

While the financial details of the latest transaction and the size of the new stake have not been disclosed, a spokesperson for Food Union confirmed PAG now holds a majority share, with a very small amount held by another undisclosed party. Meridian is no longer involved.

PAG acquired the new interest “through the acquisition of equity from the founder and other private stakeholders”, according to a statement, which added the deal is subject to regulatory approval. That is expected by the end of the current quarter.

“Full operational control over dairy and ice-cream production and direct-to-consumer distribution enterprises in Europe will pass to PAG, an existing stakeholder and board member of Food Union Europe entities,” the statement read.

Food Union supplies six European markets each with their own business units. Rīgas piena kombināts, Valmieras piens and Premia FFL in Latvia; Premia TKH in Estonia; Premia KPC in Lithuania; Premier Is, Hjem Is and Frast in Denmark; Isbjorn Is and Den Norske Isbilen in Norway; and Alpin57Lux in Romania.

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By GlobalData

Lincoln Pan, a partner and co-head of private equity at PAG, said: “We believe strongly in the company’s unrivalled market position across its core markets in Latvia, Estonia, Lithuania, Denmark, Norway and Romania. We look forward to working with the existing management to support Food Union’s continued growth and expansion.”

The portfolio features ice-cream brands such as Dobbel and Ekselence and dairy products such as cheese and butter under the Kārums and Dzintars lines. It also offers dairy products catering to children through the Lakto Diamond brand.

Food Union generates €290m in revenue across the group employing around 2,500 workers, according to its website.

Post transaction, Arturs Cirjevskis, the CEO of Food Union in Europe, will remain in place, along with the divisional regional managers.

Cirjevskis said: “Food Union today is a strong, resilient, and well-positioned player in regions where further growth is anticipated.

“With ongoing and upcoming investments in manufacturing technologies, automation, and operational excellence in general, we anticipate further strengthening in domestic markets and exports in the coming years.”

PAG’s other investments include the purchases, in their entirety, of Australian companies Patties Foods and Vesco Foods in 2022.

Its portfolio also features the Australia retail franchise Craveable Brands, chicken processing companies The Cordina Group and Shandong Fengxiang in Australia and China, respectively. And Youran Dairy, also in China.

Food Union is also present in China, where it entered the country in 2015. The following year, the company started construction of two plants in Dongjing and Inner Mongolia where production began in 2018. Its dairy brands Bravo Mama and Lakto Diamond are sold in China.