Lion readies Picard exit with €2.25bn Aryzta deal

Greg Gille
31 March 2015

Tweet
Facebook
LinkedIn
Google plus
Send to

Listed food business Aryzta has entered negotiations to acquire a 49% stake in French frozen food specialist Picard Surgelés, with current owner Lion Capital retaining a stake.

The deal values Picard at €2.25bn, equating to nearly 12x EBITDA. Aryzta would pay €446m for its stake in the company, financing the deal via the recent placement of shares in its Origin subsidiary.

Aryzta secured an option to buy the remainder of Picard within three to five years.

Lion Capital will retain a stake in the business for the time being. The GP acquired Picard from BC Partners in August 2010, with the deal valued at €1.5bn. Around 65% of deal value was reported at the time to consist of debt supplied by Crédit Suisse, Morgan Stanley and Citigroup. BC was said to have reaped 2x through the sale. It had bought the company from a syndicate including Astorg Partners and Montagu Private Equity in December 2004 for €1.3bn.

In August 2013, Picard issued a €480m floating-rate note to refinance the remaining €500m senior debt package that was put in place at the time of Lion's buyout in 2010.

In February this year, Picard completed another refinancing through the placement of a €770m bond, resulting in a dividend of €602m for its private equity backer.

Picard issued €428m in new senior notes with a 7.75% coupon, to mature in 2020, and offered a €342m tap of the €480m floating rate note issued in August 2013, due to mature in 2019.

The refinancing resulted in an 88% increase of Picard's debt, causing the company's net leverage to increase from 5.2x in 2014 to an estimated 7.9x for 2015.

Lion Capital could not be reached for comment at the time of publication.

Company
Founded in 1973 and headquartered in Paris, Picard is a retailer of frozen food goods. It sells 1,100 products and operates 900 stores in France.

The company generated €1.37bn in revenues (compared to €1.1bn at the time of the 2010 buyout) and recorded an EBITDA of €192m for the year ending in March 2015.

People
Lyndon Lea represented Lion Capital on the deal. Owen Killian is the CEO of Aryzta.