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April 3, 2012

UK: PE “mulls merger” of Premier brands, Symington’s

Competing private-equity investors are reportedly vying to acquire the non-core brands of Premier Foods plc and UK food manufacturer Symington's, with an eye to merging the groups into one entity.

Competing private-equity investors are reportedly vying to acquire the non-core brands of Premier Foods plc and UK food manufacturer Symington’s, with an eye to merging the groups into one entity.

According to a report in The Sunday Times, PAI Partners and Permira are both considering a plan to merge Premier Foods’ unwanted food brands with Symington’s. 

Symington’s manufactures various brands including Ragu, Aunt Bessie’s and Chicken Tonight. It also has the rights to Campbell’s soup in the UK and Ireland. According to the report, the business has been put up for sale by its shareholders – the group’s current management and investment vehicle Bridgepoint. 

However, a report in The Yorkshire Post also suggested that Symington’s current owners could be looking to raise capital in order to acquire Premier’s brands. 

Premier has put various non-core brands, including Robertson’s, Angel Delight, Bird’s and Sarson’s vinegar, on the block in order to focus on its eight “power brands” and as part of its re-financing agreement. Under its four-and-a-half year re-financing package, which will extend its bank facilities of GBP1.4bn until June 2016, Premier must raise GBP330m of disposals by end-June 2014. 

According to Panmure Gordon analyst Damian McNeela, the potential merger of Syminton’s and Premier’s brands increases Premier’s chances of reaching its disposal target. 

“We believe that the combination of these brands would create sufficient scale to be attractive to private equity and in so doing creates a credible purchaser for Premier’s non core assets,” he said. “The emergence of a number of possible purchasers of its non core brands should therefore improve the chances of achieving this target.”

Premier Foods declined to comment, while Symington’s and Bridgepoint were unavailable for comment. 

This article was originally published on 2 April. It has been re-published due to a hardware failure that affected the site between 18:00 and 21:30 that day. All original articles are currently unavailable but we are working to fix the problem. 

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