Bidders vying to buy Dublin-based Valeo Foods, the owner of brands from Jacobs biscuits to Batchelors baked beans which is on the market for more than €1.7 billion, have been whittled down to a shortlist of three private-equity firms.
Paris-based PAI Partners, London-headquartered Cinven and Bain Capital, the Boston outfit co-founded by former US presidential candidate Mitt Romney, have been given until the end of May to submit final bids for Valeo, according to sources, confirming a recent report by deals publication Mergermarket.
Valeo's controlling shareholder CapVest, co-founded by Cavan financier Seamus Fitzpatrick, hired Goldman Sachs earlier this year to find a buyer for the business, which also includes Odlums, Kettle Chips and Kelkin gluten-free products in its stable of ambient food brands.
Formed in 2010 through the merger of CapVest-backed Batchelors and the food division of Dublin-listed Origin Enterprises, which owned Odlums, Shamrock and Roma, Valeo went on the following year to buy Jacob Fruitfield.
Jacob Fruitfield's managing director, Seamus Kearney, a one-time senior Aer Lingus executive, became chief executive of the wider group on completion of that deal. Origin went on to sell its 32 per cent stake in the business in 2015 in a deal worth about €87 million.
Valeo made its first acquisition outside of the Republic in 2014 by acquiring the UK’s biggest honey brand, Rowse Honey. Rowse moved earlier this year to take on Nutella by moving into chocolate spreads.
In May 2015, Valeo completed its first acquisition in continental Europe with the purchase of leading Italian based food producer Balconi, which specialises in the production of sponge-based cake products and biscuits.
Earlier this year, the Dublin group bought German confectioner Schluckwerder, famous for its Lübeck marzipan sweets, in a deal that added almost 500 staff to build its workforce to 4,500 and boost annual sales to €1.2 billion. All told, the company has completed 18 acquisitions since its foundation.
The Republic now accounts for less than a third of group revenues.
Valuation
While Valeo is expected to trade for at least €1.7 billion, based on an earnings multiple of 10 times its current run-rate of €170 million of annual earnings before interest, tax, depreciation and amortisation (ebitda), some industry observers suggest that it could achieve a higher valuation.
Spokesmen for CapVest, PAI Partners and Cinven declined to comment, while a representative for Bain Capital did not respond to a request for comment.
Last month, CapVest agreed to the sale of Eight Fifty Food Group, which owns Irish companies Carroll Cuisine and M&M Walshe, for an undisclosed sum to Sofina Foods, a Canadian multiprotein producer.
Eight Fifty is a supplier of both branded and own-label seafood and pork. The pork division is one of the largest processors and suppliers of products across Britain and Ireland. The group employs about 8,300 people, across 23 manufacturing sites.
