PEP buys Australia’s Pinnacle Foods

Australian private equity manager Pacific Equity Partners (PEP) has acquired local food manufacturing business Pinnacle Foods for an undisclosed sum.

PEP buys the company from Ireland-headquartered food conglomerate Kerry Group, which reportedly fetched up to A$250 million ($192 million; €177 million) in the sale, local media said.

Pinnacle is the Australia unit of Kerry, supplying bakery ingredients and frozen specialty products to major supermarkets including Coles and Woolworths, as well as smaller food service providers.

In Kerry’s 2014 preliminary annual results presentation late last month, the firm said it was in advanced negotiations to dispose of the Australian lifestyle bakery business Pinnacle, which generates annual revenues of around A$225 million, as it was considered non-core to its global operations.

The move shows PEP continues to take advantage of Australia’s corporate carve-out opportunities, having made similar investments in the past.

In May last year, PEP exited its investment in Peter’s Food Group, gaining a 2.73x multiple and 86 percent IRR, having acquired the business from parent company Nestle Oceania in June 2012, subsequently making significant operational changes.

As the firm continues to make investments and exits, it is also in the market with a A$2 billion fund, of which it has reportedly raised A$1.5 billion. The firm is also raising a co-investment vehicle alongside the fund, which is expected to hold as much as A$1 billion from investors.