Blackstone and PAI mull over United Biscuit sale

Greg Gille
@unquotenews
22 July 2010

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Blackstone and PAI Partners are looking to sell British food company United Biscuits, according to reports.

The private equity firms are currently on the lookout for advisers to the sale, which could net £2bn. Goldman Sachs and JP Morgan are understood to be in charge of the auction process, with a view to concluding the sale process by early 2011.

While a flotation could be considered if offers don't match the sellers' expectations, a trade sale currently seems to be the most likely outcome. Food giants Premier food and Kraft have both been tipped as possible buyers. PAI and Blackstone are also mulling a separate sale of the company's snacks and biscuits businesses, in order to attract broader interest.

The private equity houses acquired United Biscuits in 2006, winning the auction for a £1.6bn secondary buyout from Cinven and MidOcean Partners. Founded in 1948, the company owns several popular brands such as McVitie's, The Real McCoy's crisps and KP Nuts. Despite the downturn, United Biscuits saw its turnover grow by 5% to £1.26bn and its EBITDA by 13.7% to £223m in 2009.

The appetite for defensive assets (resilient to the crisis) seems to be on the rise; PAI Partners is also looking to exit French yoghurt maker Yoplait, attracting both private equity players and large food corporations. Meanwhile, Permira-backed Birds Eye has just snatched frozen food specialist Findus Italy from Unilever for €805m.