PAI-backed Froneri buys Tip Top in $380m deal

No extra equity was injected into Froneri to fund the acquisition, Unquote has learned. 

Froneri has confirmed that the Tip Top business will continue to be led by the existing management team, and that the Tip Top name and its operations, including the Auckland-based factory site, will be maintained.

Alongside Froneri, bidders BGH Capital, Mercury Capital and Pacific Equity Partners were believed to be competing for Tip Top in a sale process run by First NZ Capital, the Australian Financial Review reported in March.

PAI bought the business, then known as R&R Ice Cream, from Oaktree Capital in an €850m deal in 2013. At the time, PAI invested via its Europe V vehicle, which closed on €2.7bn in 2009.

Subsequently, Nestlé and R&R agreed to set up Froneri, a joint venture, in 2016. The new company combined Nestlé and R&R's ice-cream activities in the relevant countries and started operating Nestlé's European frozen food business (excluding pizza and retail frozen food in Italy), as well as its chilled dairy business in the Philippines. The business is currently owned 50/50 by PAI and Nestlé, Unquote understands.  

Froneri is present in 20 countries and generated revenues of €2.5bn in 2017. With a workforce of 10,000, Froneri is the third largest ice-cream manufacturer in the world, according to a statement by Fonterra. 

Fonterra is a dairy nutrition company owned by 10,000 farmers and their families. Headquartered in Auckland, the business employs 22,000 people. Fonterra acquired Tip Top in 2001.

Company
With origins dating back to 1936, Tip Top in an ice-cream company based in Auckland. The business generated sales of around NZD 150m ($102m) and expected to post an EBITDA of NZD 20-25m, the Australian Financial Review disclosed in March. 

People
Froneri – Ibrahim Najafi (CEO).
Tip Top – Kim Ballinger (managing director).
Fonterra – Miles Hurrell (CEO).

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