Lion to sell stake in Picard to trade buyer

Lion Capital has partially exited its investment in French frozen food business Picard, selling a 49 percent stake to Zurich-based food business ARYZTA, according to a joint statement from Lion and ARYZTA.

ARYZTA, which describes itself as one of the largest frozen bakery companies in the world, operating 60 bakeries and kitchens across the globe, will pay €446.6 million for the stake in a deal which gives Picard an enterprise value of €2.25 billion.

Lion declined to comment on the return generated from the partial sale.

Founded in 1974, Picard operated a network of nearly 1,000 retail outlets and a product range of more than 1,100 offerings under the Picard brand, according to Lion’s website. The business also operates a smaller portfolio of stores in Asia and has recently branched out into Sweden and Belgium.

Estimated fiscal year end March 2015 run-rate revenues and adjusted run-rate EBITDA for Picard are €1.37 billion and €192 million respectively, according to the statement.

“The investment in Picard is consistent with ARYZTA’s strategy of consumer relevancy through diversifying markets and channel positioning,” ARYZTA CEO Owen Killian said. “Picard has delivered consistent revenue, EBITDA and market share growth over the past forty years. It offers ARYZTA the future potential to acquire a highly successful business to consumer platform focused on premium speciality food, that complements ARYZTA’s business to professional platform.”

Lion is Picard’s third private equity owner, having acquired the business from BC Partners in October 2010 in a deal valuing Picard at €1.5 million. BC Partners bought the business in 2004 for €1.3 billion from Candover Partners, which had acquired it from French retailer Carrefour in 2001.

Following its investment, ARYZTA will have two seats on the Picard board and will have the right to exercise a call option in three to five years to acquire 100 percent of the business, according to the statement.

The investment is conditional on limited conditions, including anti-trust clearance, the statement said.

In February Lion offloaded specialty outdoor equipment and clothing retailer AS Adventure Group to Paris-based PAI Partners in a deal valuing the business at €400 million. Lion will be keen to return capital to its investors as it makes its final investments from its €1.53 billion Fund III. Market sources have indicated that the firm is gearing up to raise its fourth buyout fund this year.

PEI recently sat down with Lion founder Lyndon Lea. Click here to read the interview.