
Nomad Holdings Wanders Off With Permira's Iglo Foods
NEW YORK (TheDeal) – Private equity firm Permira is to sell the company which markets Birds Eye branded frozen foods in Britain to London-listed cash shell Nomad Holdings in a deal that valuesIglo Foods Group at 2.6 billion euros, or $2.79 billion.
The deal will primarily be funded with cash raised by Nomad from its $500 million initial public offering in London last year, a private placement of $750 million at $10.50 per share to a limited group of institutional investors and the expected early exercise of Nomad's existing warrants. Nomad has also turned to Credit Suisse, Barclays and UBS Investment Bank for help with amending Iglo's existing senior creditor agreements to use a portion of its existing debt. Iglo's net debt to Ebitda leverage ratio is expected to fall to less than 4, once the deal closes, most likely in the second quarter of this year.
Permira is expected to retain a 9% stake in the business, and together with senior management will re-invest a portion of its proceeds into 133.5 million euros of equity at closing. It has made 2.4 times its investment in Iglo so far.
Nomad was founded by U.S. consumer goods investors, Noam Gottesman, the CEO of Toms Capital, and Jarden founder Martin Franklin, and brought in former British banker Paul Myners as chairman. They set up Nomad to acquire an unidentified target business in the consumer goods sector and now intend to use Iglo's holding vehicle Nomad Foods as a platform for further acquisitions in the sector.
The deal was not sourced via an auction, according to a source close to the situation, but Permira and Franklin worked together on the acquisition through another Franklin business, Platform Specialty Products (PAH) - Get Report, of the British private equity firm's Arysta LifeScience last fall. Franklin would therefore have been well aware of what other businesses Permira had to offer.
Nomad is now likely to seek to transfer the primary listing of its shares on the New York Stock Exchange.
Iglo, which has big operations in Germany and Austria as well as selling Findus-branded goods in Italy, is best known in Britain for its Birds Eye Fish Fingers and frozen peas brands. In the U.S. the Birds Eye brand is owned by Pinnacle Foods Group (PF) .
Permira bought Iglo from Unilever (UN) - Get Report for 1.8 billion euros in 2006, financing the deal with 1.5 billion euros of loans and in 2010 added Unilever's Findus-branded Italian business, adding further investment and a further 500 million euros of loans. The buyout firm tried to sell Iglo in 2012 but offers did not meet the asking price. It refinanced the company in 2012, paying itself a 319 million euros dividend, and refinanced again last year with a covenant-lite package of term loans and high-yield bonds.
Under Permira's ownership, Iglo has grown to be Europe's largest frozen food business. In October 2010, the Permira Funds provided additional investment to enable the acquisition of Findus Italy adding significant scale to the group. Iglo is the market leader in seven out of the 12 countries in which it operates, including the U.K., Germany and Italy, which account for about 85% of sales. The company reported revenue of 1.5 billion euros and Ebitda of 306 million euros for the 2014 fiscal year.
Iglo CEO Elio Leoni Sceti, the former CEO of EMI Group's recorded music division, is to leave at the end of June to take up another CEO post, reportedly at cosmetic products group Coty (COTY) - Get Report. He will retain a position as non-executive director at Iglo.
Shares in British Virgin Islands-registered Nomad were suspended at the open on Monday, and remained suspended after the deal was announced. The deal is defined as a reverse takeover under U.K. listing rules.
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