BC meets Advent on price for Aviagen

In a £255m secondary buyout, Advent International has acquired Aviagen Group, the world’s largest chicken breeder, from fellow financial investor BC Partners.

European private equity group BC Partners has agreed to sell Aviagen Group, the meat poultry breeding business, to Advent International, in a £255m secondary buyout.

Originally BC Partners had been looking to sell the business for a price closer to £300m. Negotiations with Advent over a deal reportedly lapsed in mid-May, but the two parties subsequently resumed talks to finally reach the agreement announced today.

BC Partners, investing from its E4.3bn BC European Capital VII fund, first started to build up Aviagen in late 1998, following the initial £110m purchase, from listed UK conglomerate Hillsdown Holdings, of the then market leading poultry breeder Ross Breeders. It then merged Ross with rival Arbor Acres which it acquired in August 1999 for £65m.

According to a source close to the transaction, BC Partners achieved a return of more than three times its investment in Aviagen. The disposal comes ahead of a new fundraising campaign for the firm, slated to officially launch some time next year.

Under BC Partners’ stewardship, Aviagen built up a 47 per cent share of the global market for poultry breeding stock. Turnover and EBITDA increased from £74m and £10m respectively in 1999 to £156m and £30m in 2002. The company, which employs 1,500 people, is based in Edinburgh, UK, and Huntsville, Alabama. £15m, or just under 10 per cent of turnover, is invested annually in research and development, carried out by a team of 50 veterinarians, biotechnologists, geneticists and microbiologists.

New owner Advent, which negotiated the deal through its European healthcare and life science group led by Humphrey Battcock, intends to use its global network of offices to further grow the business, both organically and through acquisitions. Advent hopes to exit the business through IPO on an international stock exchange in three to four years time.  

Said a source close to the negotiations: “BC Partners is very strong in Europe, whereas Advent has a global presence. That’s what makes this an Advent deal. Agreeing a price was not easy, but in the end there was no obvious trade buyer, and BC had nowhere else to go.”

Royal Bank of Scotland is providing debt for the transaction. BC Partners was advised by JP Morgan, KPMG and Dickson Minto. Advent was advised by Deloitte & Touche Corporate Finance, Morgan Stanley and Lovells.