Sarah Thompson and Anthony Macdonald
Jul 24, 2019
AFR
Global buyout firm KKR & Co is set to add Australia’s biggest biscuits company to its portfolio.
Street Talk can reveal American food giant Campbell Soup Co has finally agreed to sell its international arm, which makes most of its sales from Australia’s Arnott’s, after an auction that has almost stretched one year.
KKR, advised by Jefferies, was anointed as the successful bidder overnight, lender sources said.
It is understood the sale involves the entire Campbell International division, which includes Campbell’s soup sold in Australia.
The auction had descended into a two horse race between global buyout bigwig KKR and Australia’s Pacific Equity Partners.
The two private equity firms went head to head in the final bidding round last week – and had both made final preparations.
KKR’s Australian dealmakers registered a bunch of Australian companies under the “Snacking Investments” moniker last week, while PEP established its “Crimson” chain of bidding vehicles late last month.
KKR also saw off Kraft Heinz – which has a $US38.9 billion market capitalisation, and Mondelez International – also a $US79 billion gorilla as part of the protracted process, as well as a handful of rival sponsor firms.
Campbell Soup first flagged its international portfolio was for sale last August following a strategic review.
Goldman Sachs and Centerview Partners managed the auction.
The Campbell International portfolio recorded $US1.05 billion revenue and $US202 million in earnings before interest, tax, depreciation and amortisation in the 2018 financial year from the sale of snacks, soup, stock and juices in Australia, New Zealand, Asia Pacific and EMEA.
It was expected to be worth around $US3 billion. A $US3 billion offer would imply about 15-times last financial year’s earnings.
Snacks business Arnott’s is by far the biggest single brand in the portfolio, accounting for $US737 million annual revenue according to sale documents that were sent to potential buyers earlier in the process. Its strong brands include the likes of Tim Tams, Mint Slice and Shapes.
Campbell International’s next biggest market is China, the information memorandum said, with sales worth $US193 million.
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