Blog: Dean BestLion gets its prey and pounces for Picard

Dean Best | 27 July 2010

Private equity just cannot keep away from the food industry headlines at the moment.

After a week in which the future of yoghurt maker Yoplait and snacks giant United Biscuits (two companies owned by buyout houses) came to the fore, private-equity firm Lion Capital moved to snap up French frozen-food retailer Picard.

The EUR1.5bn deal, which remains subject to competition authority authorisation, is a boost for Lion after being pipped to the post last Monday when private-equity firm Permira bought Findus Italy from Unilever.

As we report today (27 July), Lion is Picard's third successive private-equity owner, so there should be relatively little cost for the buyout house to extract from the business. To generate returns, Lion and Picard is likely to look to expand at home and abroad.

In any case, all these deals suggest two things: one, private equity is attracted to the defensive nature of the food industry, which has proved relatively resilient during the recession and are keen to buy established brands rather than own label.

And two, for private equity firms looking to sell, the recent recovery in the markets means that now could be a good time to get a decent return on their investment.


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