Pacific Equity Partners (PEP) is accelerating its disposal of portfolio companies by hiring Macquarie and Morgan Stanley to explore an initial public offering for Peters Ice Cream, a company the private equity firm bought for about $250 million in August 2012, reporting by Data Room has discovered.
Sydney-based PEP is still exploring the sale of Peters through a so-called trade sale process that it is running itself by meeting with potential buyers of the iconic Australian ice cream brand, which traces its origins back to 1907. Today, Spotless, the facilities management company owned by PEP, said it would sell about $1 billion worth of shares in an IPO next month.
After buying Peters, PEP sold the Mulgrave factory site in Victoria for about $60m in February this year and leased it back. Murray Goulburn was examining a potential acquisition of Peters but its interest has waned.
Australian and New Zealand ice cream demand is flat while margins for producers are being squeezed because of voracious competition between Unilever, Bulla Ice Cream and Peters. Unilever, Peters and Bulla each have about a third of the Australian ice cream market.
Peters’ earnings before interest, tax depreciation and amortisation are about $44m a year and the company is telling potential acquirers its future EBITDA may rise to about $55m a year.
Earlier this year though, Kidder Williams banker David Williams -- who advised Bega in the Warrnambool Cheese and Butter Factory takeover battle -- warned at a Sydney conference: “The big multiples will come from dairy that is full protein, shelf stable and export focused and not from selling frozen water and sugar in the local market.”
Peters declined to comment.
(Reporting by Brett.Cole@businessspectator.com.au)
(Editing by firstname.lastname@example.org)