Lion Capital to acuire frozen food company Picard Surgeles for $1.94B

Lion Capital to acuire frozen food company Picard Surgeles for $1.94B

Lion Capital to acuire frozen food company Picard Surgeles for $1.94B

Lion Capital said Monday it had agreed to buy French frozen-food retailer Picard Surgelés from BC Partners, beating off strong competition from rival buyout firms.

Financial details of the transaction weren't disclosed but people familiar with the situation said earlier that the deal valued Picard at €1.5 billion ($1.94 billion).

BC Partners bought Picard for €1.3 billion in 2004 from Candover. Prior to that it was owned by French supermarket group Carrefour SA. One person said that BC Partners would make twice the cash it put into the acquisition. The deal is expected to complete in the fourth quarter following regulatory approval.

Picard sells a very wide range of product references through a network of 820 retailing outlets. Its range covers all product categories, from starters to desserts and from raw ingredients to prepared meals.

"Throughout the economic cycle, the company has driven consistently strong financial performance by offering a high quality and convenient alternative to fresh food, underpinned by a strong emphasis on product innovation," Lyndon Lea, partner of Lion Capital, said of Picard.

Lion Capital focuses on consumer brands in particular in the food and retailing sectors. Other investments include U.K. cereal brand Weetabix and the Schweppes and Orangina beverage brands. It has also invested in Russian juice producer Nidan and most recently bought a majority stake in Russian Alcohol, the country's largest producer of vodka.

The buyout firm, which just last week lost out to rival Permira to buy Unilever PLC's frozen-foods business made its pre-emptive bid ahead of a final bid deadline Wednesday.

Other private-equity firms bidding for the company included Eurazeo, a France-based buyout firm who was working with the original founders of the business, Bain Capital and CVC Capital Partners.

One person said that Lion Capital hadn't put in the highest bid but that CVC, which was in pole position until Friday, wasn't able to put firm financing in place ahead of Lion Capital's bid over the weekend. A spokesperson for CVC declined to comment.

Execution and deliverability have become key for private equity buyers as the few good assets coming to market have triggered strong competition among buyout funds desperate to offload funds and start investing again after a two-year hiatus.

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