6 PE-backed deals that are finger-licking good

PAI Partners, Advent International, Apax Partners and Investindustrial are among the PE firms making deals in the food sector.

The presence of private equity firms in the food sector was subdued in 2022, but we are now seeing an uptick in activity as PE firms add new flavours to their portfolios. While some firms are focusing on sweets, hand-cooked nibbles and desserts, others are shifting their gaze to fast food chains across Europe and the US.

Of the six deals in this piece, five were announced in the food sector at the beginning of 2023 alone, signalling a whetting of private equity firms’ appetite for the food sector, amid food inflation hitting a record 13.3 percent in December.

PE Hub Europe and affiliate title PE Hub has covered many deals in the food segment. Here are six recent deals that caught our attention (in reverse chronological order):

1. PAI Partners adds La Compagnie des Desserts to menu

In February, PAI Partners announced that it will acquire La Compagnie des Desserts (LCDD), a premium frozen desserts supplier, from Argos Wityu. LCDD is headquartered in Lézignan-Corbières, France.

PAI will partner with LCDD via its PAI Mid-Market Fund (PAI MMF) to expand its presence and accelerate its international expansion, both organically and through acquisitions, according to a release.

“The company is uniquely positioned to capitalise on the growing demand for outsourced dessert preparation across hotels, restaurants and catering businesses, driven by their need to innovate and manage labour shortages in the industry,” said Stefano Drago, founding partner at PAI MMF.

2. Apax-backed Europe Snacks to buy Burts Snacks

In early February, Apax Partners-backed Europe Snacks announced that it will acquire 100 percent of Burts Snacks, a hand-cooked snacking firm headquartered in Plymouth, Devon.

This acquisition is likely to be completed in March 2023.

“Since our initial investment in Europe Snacks, we have continuously supported the company and its management team to position itself at the forefront of innovation and scale its business, notably in the UK with the transformational acquisition of Kolak in 2016,” said Bruno Candelier, partner at Apax.

3. Triton Pacific-backed Tasty Hut buys Pizza Hut restaurant in Kentucky

Also in early February, Tasty Hut, backed by Triton Pacific Capital Partners, acquired a Pizza Hut restaurant in Monticello, Kentucky. No financial terms were disclosed.

“The growth prospects of this acquisition are encouraging, and we expect it to be a key contributor to our broader portfolio and our overall value creation strategy,” said Craig Faggen, Triton Pacific CEO, in a statement.

Tasty Hut now owns 221 Pizza Hut restaurants across 12 US states. In total, Triton Pacific’s affiliated restaurant management company, Tasty Restaurant Group, manages a portfolio of nearly 370 quick service on behalf of Triton Pacific sponsored funds.

4. McWin to take big bite of L’Osteria at €400m valuation

In late January, McWin agreed to acquire a major stake in FR L’Osteria, a casual dining operator in Germany and Austria, valuing the company at around €400 million.

L’Osteria, established in 1999, operates 157 stores with more than 6,000 employees across the DACH region, UK, France, Luxembourg, the Netherlands and the Czech Republic. It is headquartered in Munich.

“The leadership team has achieved many admirable milestones, opening more than 100 restaurants in Germany, successful expansion into seven further international markets, adept navigation of covid and a market-leading recovery that followed it,” said Harry Goss, partner, and head of food service at McWin.

5. Advent-backed IRCA in talks to buy Kerry’s Sweet Ingredients Portfolio

In early January, Advent International portfolio company IRCA started talks to acquire Kerry Group’s Sweet Ingredients Portfolio for €500 million, comprising an initial cash consideration of €375 million and a €125 million interest bearing vendor loan note.

Sweet Ingredients is a producer of sweet and cereal items with a focus on Europe and the US. It operates six locations across the UK, the Netherlands, Germany and France in addition to four production facilities in the US (in Illinois, Kansas, Missouri, and California).

Advent managing director Francesco Casiraghi later told PE Hub Europe that US growth is at the heart of Advent’s plans for IRCA.

6. Investindustrial takes bite of Italian marketplace chain Eataly 

In September 2022, Investindustrial announced that it had agreed to acquire a 52 percent stake in Eataly, the Italian marketplace chain, for €200 million.

Eataly, headquartered in Alba, northern Italy, promotes and sells food ‘Made in Italy’. It has been in operation for almost 20 years and has locations globally.

PE Hub Europe expects to see more deals in the food sector in the future.