PAI sends healthy distribution to LPs

PAI has completed its second realisation from Chr. Hansen, which makes ingredients used in food, drink and health products. It brings distributions to LPs in the past 12 months to about €3.25bn.

Paris-headquartered PAI Partners has sold about a 34 percent stake in biosciences firm Chr. Hansen for approximately DKK 1.73 billion (€232 million; $313 million). The 15 million shares sold in the transaction brings total distributions to PAI’s limited partners during the last 12 months from around €3 billion to roughly €3.25 billion.

The partial exit marks the second realisation from the business since PAI raised DKK 3.2 billion in an initial public offering in June 2010. The firm retains a 26 percent stake in Chr. Hansen, which it acquired in 2005 in a transaction valuing the company at around €1.1 billion. PAI invested in the business from its third European fund that collected €2.7 billion in 2001.

PAI was not available for comment at press time. Goldman Sachs and JP Morgan acted as bookrunners for the deal.

The 2010 IPO of CHR Hansen, which supplies bioscience-based ingredients to the food, health and animal feed industries, came in a tough environment for IPOs that has continued into 2011.

Recent realisations for the firm include the €930 million sale of Italian clothing retailer Gruppo Coin in May. PAI did not disclose the return on investment delivered by the transaction but a spokesperson for the firm said PAI was very pleased with the “good return” generated by the exit. The deal was PAI’s fourth exit of 2011, following the sale in March of dairy products group Yoplait that generated roughly a 10x return multiple, market sources told Private Equity International at the time.

Earlier this month, PAI hired former chief executive of PepsiCo’s Western European business Charles Bouaziz as a partner in its consumer goods unit. Bouaziz worked at PepsiCo from 1991 to 2010, initially as head of its French business.

PAI’s recent realisations and acquisitions are further evidence of a return to activity following a turbulent period in 2009 that saw the abrupt departure of chief executive Dominique Megrét and a reduction in the size of PAI’s fifth fund, from €5.35 billion to €2.7 billion. PAI’s Fund V is approximately 60 percent invested.