CapVest, Blackstone in talks over £1bn Unilever unit

The two private equity firms are reportedly considering forming a consortium to make a £1bn bid for Unilever’s frozen foods business, which includes brands such as Birds Eye and Iglo.

CapVest Equity Partners, the European private equity arm of US insurer AIG, is reportedly in talks with the Blackstone Group regarding a joint offer for Unilever’s frozen food business.
 
According to a report in today’s edition of UK newspaper The Daily Telegraph, the two private equity firms have tasked Merrill Lynch and Deutsche Bank with advisory duties on a £1 billion (€1.46 billion; $1.87 billion) bid for the Unilever unit, which includes brands such as Captain Birds Eye and Iglo.
 
Blackstone declined to comment and CapVest Equity Partners was not immediately available to comment for this article.
 
CapVest first entered the frozen food sector in 2002 when it purchased Legal & General Ventures’ stake in Grimsby-based Young’s Bluecrest, the UK’s largest processor of frozen seafood, in a £137 million deal.
 
In January, CapVest acquired frozen food products company Findus from Swedish private equity firm EQT for an undisclosed sum. The transaction, reported to be worth around £450 million at the time, was made through CapVest portfolio company Foodvest.
 
Other private equity firms believed to have shown an interest in Unilever’s frozen foods business include Lion Capital, PAI Partners, Candover, Permira and Apax, according to the report.
 
Unilever announced that it was considering strategic options for its frozen foods unit, which has sales of €1.4 billion, last September. In February, Unilever group chief executive Patrick Cescau said in a statement that the consumer giant had “concluded that its great frozen food brands could prosper under other ownership and…now was a good time to consider divestment as it would likely lead the expected future consolidation in the frozen food sector”.
 
The same month, Lehman Brothers Merchant Banking, the private equity arm of the US bank, agreed to acquire H.J. Heinz Company’s European seafood business for €425 million.