PEP buys Nestle’s ice cream business

The transaction includes the purchase of Peters' Mulgrave factory in the state of Victoria.

Previous reports about the sales process indicated that bids of more than A$300 million ($305 million) were likely to come in, based on Peters' 2011 pretax profits of around A$25 million.

Barclays Capital provided advice to PEP on the deal, while Nestle was advised by J.P. Morgan. At least one other private equity firm was said to have been strongly interested in acquiring Peters.

Peters Ice Cream owns several sub-brands, namely Original, Light & Creamy, Billabong, Frosty Fruits and Monaco Bar, all of which will now come under PEP's ownership. The PE firm will also gain a long-term license to market and sell various global Nestle ice cream brands, including Drumstick, Heaven, Maxibon, Skinny Cow and Milo Scoop Shake.

The company employs around 500 people, the majority of which will stay at Peters, while others will continue working for Nestle.

Australasia as a sub region is significantly larger than other Asian markets when it comes to LBO activity. Between 2005 and 2011, total PE investment in Australia was $74 billion and 80% of that was LBOs. However, in 2011, only 11% of M&A volume involved private equity, compared to 28% in the US.

"There is a lot of catch-up going on and this offers some interesting opportunities for the patient and the disciplined," PEP's co-founder and managing director, Tim Sims, told AVCJ earlier this week. "Some of our most recent deals we have stalked for more than two years."

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• Topics
• Buyouts
• Consumer
• Australasia
• buyout
• Consumer
• Australia
• Pacific Equity Partners