KKR buys Australian biscuit business Arnott's for $2.2b

The GP is participating through its core investments strategy – the third pan-Asian fund is not involved – which focuses on assets that require extended holding periods and generate lower returns than traditional PE but are stable and cash generative. The strategy accounts for most of KKR’s $11.8 billion in balance sheet investments globally. It includes Australian cancer and cardiac services specialist GenesisCare, which KKR backed in 2018, two years after its Asia private equity fund exited.

KKR is assuming control of a range of brands and distribution channels across the region currently held by Campbell International. They include soup, stock, juice and ready meals businesses in Australia, Malaysia, Hong Kong and Japan, and manufacturing facilities in Australia, Indonesia and Malaysia. It will also have exclusive rights to Campbell brands such as Campbell's, Swanson, V8, Prego, and Chunky in Australia, New Zealand and Malaysia as well as select other markets.

However, the bulk of Campbell International’s sales in the region come from Arnott’s, owner of Tim Tam, Australia’s most internally recognized biscuit brand. The portfolio spans chocolate, sweet and savory biscuits, and flavored snacks. Arnott’s was founded in 1847 and Campbell took a minority interest in the business in 1985 in order to avert a takeover bid by Nabisco. Campbell increased its stake in increments before acquiring full control in 1997.

Last year, the company decided to divest Campbell International and refrigerated foods business Campbell Fresh. The other key asset in the international division – Denmark-based snack foods producer Kelsen Group – was sold last month for $300 million. Campbell International’s operations, excluding Kelsen, generated approximately $885 million in sales over the past 12 months, KKR said. Total headcount was about 3,800.

“Campbell International represents a unique portfolio of iconic brands that are known and loved by consumers in Australia and across the world. We are privileged and excited to have the opportunity to invest in and grow Arnott’s as an independent business in Australia, in addition to further developing Campbell’s trusted brands across the broader Asian market,” said David Lang, a partner-level executive at KKR, in a statement.

The acquisition represents KKR’s largest in Australia since it teamed up with Värde Partners and Deutsche Bank and agreed to buy GE Capital’s Australia and New Zealand consumer lending unit for A$8.2 billion ($6.3 billion) in 2015. Last year, in addition to investing in GenesisCare, the private equity firm agreed a A$2 billion buyout of accounting software provider MYOB.

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• Topics
• Australasia
• Consumer
• Buyouts
• Australia
• KKR