Unilever sells Birds Eye, Iglo Brands to Permira
Unilever, the maker of Hellmann's mayonnaise and Knorr soups, is selling its frozen-food operations in Austria, Belgium, France, Germany, Ireland, Netherlands, Portugal and the UK. The transaction will be completed by the end of this year. The company is keeping its ice-cream business and the Italian frozen-foods division. Permira, which bought Royal Ahold NV's Spanish retail division last year, is paying 1.4 times annual revenue and 9.9 times earnings before interest, taxes, depreciation and amortization, according to the statement. Buyout firms use a combination of their own funds and debt to pay for takeovers. They then typically seek to expand the companies or improve their performance before selling them within five years to other funds or to investors through stock offerings. London-based Permira beat out CapVest Ltd., owner of Findus frozen foods in Norway, Sweden and France as well as the UK's Young's Bluecrest Seafood, the Financial Times reported today. Other possible bidders included Blackstone Capital Partners LP, Kerry Group Plc and JPMorgan Partners LLC, the Sunday Times said on Aug. 27. CapVest may now look to sell its frozen-foods holding company, the FT said today. A logical next step for Permira may be to buy the CapVest division and combine it with the Unilever brands to create a company with sales of close to € 3 billion, the newspaper said, citing industry analysts.
Unilever said in February that it would sell the Birds Eye and Iglo brands in Europe. Sales at Unilever's western European frozen-foods unit fell last year, and sales growth would have been 0.20 percentage point higher without the business, Cescau said. Unilever's profit rose 35% to € 986 million in the Q2, less than analysts estimated. Sales advanced 3.3%, trailing the 25% increase reported by Procter & Gamble, the largest food and consumer-products company, and the 3.4% gain Northfield, Illinois-based Kraft. Cescau said earlier this month that Unilever will „actively” seek opportunities to buy companies that make healthy products and personal-care goods, as well companies in developing markets such as China, India and Vietnam. Unilever, the maker of Ben & Jerry's ice cream, has been reviewing the levels of trans-fats, saturated-fats, sodium and sugar in its foods. Vevey-Switzerland-based Nestle has cut the amount of salt and sugar in its products and acquired makers of healthy snacks and nutrient-enriched foods including Uncle Tobys. The company has also developed a Maggi bouillon cube with added olive oil and less monosodium glutamate. „They might use the money to strengthen their business in foods, perhaps healthy foods, similar to Nestle's current strategy,” said Paul Hofman, an analyst at Van Lanschot NV in Den Bosch, Netherlands, who has an „buy” rating on Unilever stock. He said the company may spend „up to a billion euros” for purchases outside Europe as well as continuing to buy back stock. Birds Eye of the US is a closely held company, not owned by Unilever. (Bloomberg, unilever.com)
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.