PAI acquires Oaktree’s R&R Ice Cream

PAI Partners, the Paris-headquartered firm, has acquired R&R Ice Cream from turnaround specialist Oaktree Capital Management. 

No financial details were disclosed, but the deal is understood to value the company at €850 million. PAI declined to comment.  

Yorkshire-based R&R is Europe’s largest supplier of own-label ice cream. Established in 1985, the group is the result of successive consolidation waves within the UK ice cream industry: it merged with Treats Group, a Leeds-based ice lolly manufacturer, in 1998; it then acquired ABF’s ice cream business in 2000, and Nestle Ice Cream’s UK business in 2001. 

R&R is Europe's largest own-label ice cream maker

Oaktree bought the company in 2006, leading it through another merger with German ice cream maker Roncadin the same year. This is when the business – originally named Richmond Ice Cream – was rechristened R&R. Further acquisitions ensued, as well as a licence to produce and distribute a number of brands from the Mondelez group – the snacking and food division of the former Kraft Foods – including Milka, Toblerone, Daim, and Oreo ice creams. 

The company now has 11 production sites across Europe, with revenues totalling €600 million for the year ending 31 December 2012. 

PAI has a track record of handling large deals in the consumer sector. These have included French dairy Yoplait, on which it generated a return of 10x through a €1.2 billion sale to General Mills; Gruppo Coin, an Italian fashion retailer exited to BC Partners for €1.4 billion; and Britain’s KP Snacks, whose United Biscuits division was sold to trade player Intersnacks for nearly €500 million last year. 

The firm has been focusing on realisations over the past 18 months, with €4.6 billion returned to investors through six exits. In addition to KP Snacks, Yoplait and Grupo Coin, it also sold out of natural ingredient supplier Chr. Hansen last year, having previously exited auto repair chain Kwik Fit and engineering company Spie in the six months before that.

It is still investing from Fund V, a 2008 vintage whose original hard-cap of €5.4 billion was reduced by half the following year after internal disruption at the firm. The same vehicle was used to fund last December’s investment in Italian eyewear maker Marcollin, for which it paid €207 million.

The firm is currently on the trail to raise Fund VI, which has a target of €3 billion. The vehicle has not yet held a first close.