The Blackstone Group has continued its rapid pace of investment by clinching a $2.16 billion (€1.67 billion) deal for Pinnacle Foods, a US food manufacturer.
Blackstone will pay about $1.2 billion for the company while assuming $900 million of debt.
Pinnacle owns a number of leading US brands, including Duncan Hines baking mixes, Swanson Frozen Foods and Mrs Butterworth’s pancake syrup.
It will be the company’s third period of private equity ownership. The company was formed by US buyout firm Hicks, Muse, Tate & Furst in 2001 when it bought a number of food brands from Vlasic International. US investor C. Dean Metropoulos, who invested alongside Hicks Muse, became chairman and chief executive.
JP Morgan Partners, the buyout arm of the bank which has since been renamed CCMP Capital Advisors, took a small stake in this deal and in 2003, bought out its partners for about $485 million. In 2005, CCMP (along with Metropoulos’ investment vehicle CDM Group) merged Pinnacle with bankrupt rival Aurora Foods. Since that time, the combined group has also bought canned meats business Armour, in March 2006.
Former Kraft Foods chief executive Roger Deromedi will replace Metropoulos following the Blackstone buyout, while current Pinnacle chief executive Jeffrey Ansell will continue to run the business.
Pinnacle, which employs 8000 people in seven factories across the US, recorded annual sales of $2.1 billion last year, the company said.
Lehman Brothers advised Pinnacle while Centerview Partners and Blackstone’s corporate advisory arm advised the buying group.
The deal continues Blackstone’s hectic pace of deal-making since closing a $15.6 billion fund last year. In December alone it closed deals for UK restaurant group Tragus, US semiconductor firm Freescale, and snack-maker United Biscuits.
This year it has already completed the largest leveraged buyout on record, when its real estate group agreed a $39 billion deal for Equity Office Properties, a US real estate business. It has also spent $3.3 billion buying Pharmaceutical Technologies and Services, and joined a consortium being linked with a bid for UK supermarket chain Sainsbury’s.