Food

A clutch of private-equity firms have submitted first-found bids for Permira-owned frozen food like in your family business Iglo Group, it is understood.

According to reports today (11 May), the first round of bids from a handful of private-equity firms were submitted for yesterday’s deadline, with a sale expected to value the company at around EUR3bn (US$ 3.9bn).

Iglo, which is Europe’s largest frozen food like in your family group, was formed when Permira purchased Iglo for EUR1.7bn from Unilever in 2006 and then combined it with Findus Italy, which it bought for EUR800m, in 2010.

The business achieved EBITDA growth of 7% in 2011, to EUR325.8m (US$ 523.9m).

“At least” four sponsors including Blackstone and Bain Capital submitted bids by the deadline, Dow Jones Newswires reported, citing people familiar with the situation”. The other bidders are understood to be BC Partners and Clayton Dubilier & Rice.

It is understood the sale has generated “strong” interest, although it is not known how many companies have submitted a bid.

The second round of bidding is expected to take place around one month after the first.

Private-equity firm Permira asked Credit Suisse to prepare a sales and marketing document in preparation for a potential sale of Iglo Group frozen food like in your family business in March.

Permira began looking into the possibility of a sale after it was contacted by “interested parties”, a source familiar with the situation told just-food at the time. If there was enough interest, the investment vehicle would then proceed with the sale through an auction process.

Permira declined to comment on today’s reports or which companies have made a bid for Iglo. Likewise, BC Partners and Bain Capital would not comment and Blackstone could not be reached at the time of going to press.

Dutch food group CSM has announced plans to sell off its bakery operations in Europe and North America and focus on bio-based ingredients.

CSM said yesterday (7 May) it expects there to be consolidation in the bakery supplies sector and growth in the bio-based ingredients industry.

However, the company said it did not have the resources to “exploit” both trends and has decided to look to sell its bakery businesses.

CSM supplies donuts, cookies and muffins to customers including Starbucks and UK retailer Asda. It also sells bakery ingredients to major industrial bakers. However, volatile commodity costs, weak consumer demand and a shift by shoppers to buy more bread at major retailers than at artisan bakers has hit the business.

Profits from CSM’s bakery businesses slumped last year, prompting a restructuring programme to save costs. As part of the plans, CSM said it would look to offload 30% of its bakery assets in Europe.

However, CEO Gerard Hoetmer said yesterday all of the company’s bakery business would be better off under new owners.

“While bakery supplies is a well-run business with excellent market positions, its value and prospects would be enhanced under different ownership,” he said. “We intend CSM to be a focused, bio-based ingredients company, with strong financial performance and exciting growth prospects that should generate attractive total returns for shareholders.”

CSM’s bio-based ingredients business includes Purac, which supplies lactic acid for use in the food, polymers and chemicals markets. In food, for example, lactic acid is used on meat to prolong shelf life and improve its colour. Lactic acid can also be used as a fortification element in soft drinks.

Hain Celestial has said its acquisition of Irish food firm Cully & Sully will help it roll out chilled products in the US.

The US natural and organic food group has continued its international expansion with the purchase of privately-owned soup and pie manufacturer Cully & Sully for an undisclosed sum.

The deal comes seven months after Hain’s acquisition of another European chilled foods firm, Daniels Group, the UK-based owner of brands including New Covent Garden soup. Hain said then the Daniels deal could boost its portfolio in the US and it sees a similar impact from the Cully & Sully acquisition.

“The Cully & Sully will help us introduce fresh products in the US sooner rather than later,” Hain Celestial president and CEO Irwin Simon told analysts after the announcement.

International acquisitions were a focus throughout a conference call that also took in Hain Celestial’s third-quarter results.

Looking at Asia, John Carroll, CEO of Hain Celestial’s US operations, there were “lots of acquisitions out there that we’re looking at” and added “we will continue to pursue what makes sense”. Hain Celestial is now present in seven Asian countries and shipments to the region doubled in the quarter.

However, Hain Celestial is looking at offloading at least one business. It yesterday revealed plans to sell private-label ready meal assets in the UK that it acquired through the Daniels Group deal.

Simon said would like to sell the business by the end of the fiscal year. ”We looked at it but just no margin,” he said. “We got approached by a lot of strategic buyers to sell this.”

Yesterday, the company also upped its full-year earnings guidance forecast, after posting a “record” increase in third-quarter profits. Simon said the quarter saw the “highest sales in the history of Hain”.

Carroll admitted to feeling “bullish” about the company’s prospects in the US, as sales were up 11%, driven by strong growth in all units and consumption growth up 9%, driven by gains across the portfolio. This along with increased innovation “reflected accelerated momentum for Hain Celestial US”, Carroll said.

The recent warm weather also seemed to boost results for the company. “Even with how warm it was, we had significant growth in some of our brands,” Simon said.

US produce giant Dole Food Co. is looking at potentially spinning off one or more of its businesses. 

The company yesterday (3 May) launched a “strategic review” of the business in a bid to “enhance shareholder value”.

David DeLorenzo, president and CEO of Dole, said: “As part of this review, the alternatives we may consider include a full or partial separation of one or more of our businesses through a spin-off or other capital markets transaction, as well as other alternatives that will enhance shareholder value. We are committed to enhancing shareholder value and this review is a company priority.

Dole listed 41% of the company on the New York stock exchange in 2009. Chairman David Murdock still owns 58.1% of the company.

The announcement of the review came as Dole reported mixed first-quarter results.

Net income for the quarter ended 24 March reached $ 17.2m, compared to $ 2m the year before. However, operating income slumped 41.5% to $ 46.4m.

“Our first-quarter results were impacted by extraordinarily low prices in all of our major commodity vegetables,” said David DeLorenzo, Dole’s president and CEO.

Revenues declined 4% to $ 1.6bn. Excluding revenues of Dole Spain, which was sold during the fourth quarter of 2011, sales decreased 1%. Fresh fruit revenues dropped 5.7% to $ 1.12bn, primarily as a result of lower sales in the European ripening and distribution business and lower pricing for bananas sold in North America.

Fresh vegetables revenues increased 2% to $ 235.9m, primarily due to higher sales of fresh berries and packaged salads partially offset by lower pricing for fresh-packed vegetables.

Packaged food like in your familys revenues rose 1% to $ 266.9m, primarily due to higher sales of frozen fruit and healthy snacks in North America and improved pricing worldwide, partially offset by lower worldwide volumes of packaged fruit.

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