Bain Capital is reported to be spearheading an A$3.6 billion ($2.6 billion, €2.2 billion) bid for Goodman Fielder Ltd. According to reports from Bloomberg and the Sydney Morning Herald, the Boston-based Bain Capital is teaming with Pacific Equity Partners and Goldman Sachs Capital Partners to buy the bakery chain from Burns Philp & Co.
If the offer goes through, Bain would garner a majority stake in the business, with the co-investors covering the balance. The reported purchase price would make a potential buyout of Goodman the largest ever in Australia.
Australia has not traditionally been on the radar of the larger international private equity groups. Castle Harlan set up its Australia-focused CHAMP Private Equity joint venture in 2000, but few others have targeted the continent until now. In September, The Carlyle Group established a Sydney office with the hiring Investcorp vet Simon Moore and last month PEO reported that Kohlberg Kravis Roberts had been scouring Australia for potential opportunities. Moreover, JPMorgan Partners Asia recently opened a Melbourne office, and a significant portion of its new $1.6 billion fund will be dedicated to Australian investments.
Bain Capital has invested in the region before, but its focus on the continent seems to come in spurts. The firm is already closely associated with Pacific Equity Partners, and in fact, was an early backer in the domestic Australian firm. In 1998, Bain Capital was reported to have raised $300 million for Bain Capital Pacific Fund I, LP, which would seem to correspond with the founding of Pacific Equity in that same year.
The Bain/Pacific pairing also has a track record with past deals and together have invested in the region with earlier buyouts of New Zealand’s Frucor Beverages in 1998 and Vertex (FKA: Carter Holt Harvey Plastic Products) in 2000.
Concerning Goodman Fielder, this is not the first time Pacific Equity has been reported to have looked at the assets. In 2001, the firm was said to be close to taking the company private in a A$3 billion deal, but a dispute over the price ultimately scuttled the deal, according to reports at the time.
Burns Philp eventually acquired the company through an A$1.9 billion hostile takeover in 2003, and earlier this year had originally announced plans to refloat the business in an A$2.2 billion IPO.
Despite the news surrounding the Bain Capital-led offer for the business, Burns Philp’s advisor, Credit Suisse First Boston, has said publicly that the company is still pursuing a dual track, implying that a sale and an IPO are both possible outcomes for Goodman.
Calls to Bain’s spokesperson were not returned by press time.