Private equity firm acquires Iglo, Birds Eye

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					6 – September 2006 – IntraFish                                                       NEWS

Private equity firm acquires Iglo, Birds Eye
How will the deal                     agressive style of private equity
                                      ownership, where focus tends to
impact Uniever’s                      be on shedding non-core assets,
commitment to the                     acquiring other businesses in its
Marine Stewardship                    sector, and reducing costs,
                                      remains one of the more intrigu-
Council’s eco-label                   ing questions surrounding the
program?                              sale, and one which has wide-
                                      spread implications.
Global food manufacturer                One of the hallmarks of
Unilever said in August it is sell-   Unilever’s fish business was its
ing the majority of its European      commitment to sustainability.
frozen foods business to equity       Unilever and environmental
firm Permira Funds for €1.725         group World Wildlife Fund part-
billion ($2.2 billion), ushering in   nered to create the Marine
a new style of ownership for one      Stewardship Council (MSC) in
of the world’s largest seafood        1997, and though the group
sellers. The deal, subject to regu-   became an independent entity
latory approval, is expected to       in 2000, the Anglo-Dutch giant
conclude by the end of this year.     has played a key role in the pro-
  The businesses sold in the          motion and development of the
transaction include frozen foods      group.
operations in Austria, Belgium,         While Unilever said in
France, Germany, Ireland,             announcing the frozen foods
Netherlands, Portugal and the         sale it will share both knowl-
United Kingdom. Unilever had          edge and personnel with
frozen food production plants in      Permira on sustainability issues,
Bremerhaven         and     Reken,    a Unilever spokesman said there
Germany, and in Hull and              is no requirement in the sale
Lowestoft, England.                   contract for Permira to continue      PACK IT IN: Unilever sold off its frozen foods division after a long sale process.                         PHOTO: UNILEVER
  Patrick Cescau, group chief         with Unilever’s sustainable
executive for Unilever, said the      seafood policy.                       Unilever announced its entire           cern. “Unilever has been a                   foods business, including execu-
frozen foods business was “great         “It’s up to them,” Tim Johns,      line of Iglo frozen fish fingers on     strong proponent of the MSC                  tives dealing with sustainability
for    Unilever      over    many     vice president of Unilever            the German market would be              during its life in frozen fish [but]         issues.
decades,” adding he was “confi-       Global media relations said,          made      from     MSC-certified        these things happen,” Lankester                Stort said sustainable seafood
dent that the business will pros-     adding that “if they want a long-     Alaska pollock, and that it             said.                                        sourcing remains an important
per under the dedicated and           term business,” sustainability             would likely extend that             He noted Unilever will contin-             element for Unilever’s remain-
focused management that the           of fish supply would be                                                                 ue to work with sus-               ing fish business, and the firm
Permira Funds will bring.”            important.                                     The market sees few tainable seafood issues                                 would continue its support for
  Cheryl Potter, partner at             Unilever’s sustainability                                                             in purchasing for its              the MSC.
Permira, said her firm was            commitments have meant                      food deals of this size and Italian frozen foods
“delighted” to be acquiring           big business for MSC-certi-              very rarely involving brands business. In addition,                               CapVest now a seller?
“such iconic brands.”                 fied suppliers. Alaska pol-                                                             Lankaster said Permira               Permira beat out two other
    “The market sees few food         lock harvesters have been
                                                                     of    this stature."                                     would likely work to               private equity bidders for the
deals of this size and very rarely    among the biggest benefi-                    Cheryl Potter, Partner, Permira Funds      continue those commit-             division, including favorite
involving brands of this stature,”    ciary of the commitment,                                                                ments, in part for the             CapVest, parent of Young’s
Potter said.                          annually selling tens of thou-        commitment to other markets image of its products.                                   Seafood and Findus. CapVest’s
  Turnover in 2005 for the divi-      sands of metric tons of pollock       as well.                                     “Partly [the sustainable                bid was crippled after backers
sion was €1.23 billion ($1.6 bil-     to Unilever for its fish fingers                                              seafood program] has been                    CVC Partners and Kohlberg
lion), with earnings before inter-    and other products.                   MSC unconcerned                         done as a business enterprise,”              Kravis Roberts (KKR) withdrew
est, taxation, depreciation and         Unilever initially committed to       MSC Board Member Kees Lankester said. “It’s been used                              from the bidding process.
amortization of €174 million          buying all its fish from sustain-     Lankester said the sale of to build up their image.”                                 Analysts now speculate CapVest
($222.8 million).                     able sources by 2005, a goal that     Unilever’s frozen food business           Lankester said the MSC                     will approach Permira to buy
                                      proved elusive. The company           and how it will affect its sustain- would likely contact Unilever                    out its holdings.
New owner, new style                  has made continual commit-            able fish purchasing policy has representatives to discuss con-                        Unilever announced it would
  How Unilever’s image and            ments to purchasing MSC-certi-        been discussed by the MSC, but tinuation of the sustainable                          sell the division in February, cit-
brands will fare under the more       fied products. In May 2005,           has not been considered a con- seafood program under Permira.                        ing a need to focus on core busi-
                                                                                                                      Unilever spokesman Gerbert                 ness. The company said at the
                                                                                                                    Van Genderen Stort said sus-                 time it would retain its Italy-
                                                                                                                    tainability issues were “part of             based frozen foods business.

                       Seafood Snapshot                                                                             the talks” with Permira, but
                                                                                                                    Unilever would not disclose
                                                                                                                    details of the sale negotiations.
                                                                                                                                                                   The Anglo-Dutch firm has
                                                                                                                                                                 been separating its frozen foods
                                                                                                                                                                 business for the past year in
                                                                                                                      It’s unclear still how Permira             anticipation of the sale. It sold
  Which species will major aquaculture firms invest in next?                                                        will structure its business, and
                                                                                                                    which executives from Unilever
                                                                                                                                                                 its Spanish frozen foods division
                                                                                                                                                                 to French group Bonduelle in
                                                                                                                    will continue on with the frozen             July.              —Drew Cherry
                                                       Farmed cod: 26.9%


                                                               Tilapia: 30.8%


                                        Cobia: 19.2%


                                 Barramundi: 15.4%


                   Pangasius: 7.7%


                            SOURCE: IntraFish.com readers’ poll. For more online polls, visit www.intrafish.com