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Capital Calls: Bain Capital feasts on food giants’ castoffs

2 minute read

Various bags of crisps are seen in Zurich, Switzerland, June 24, 2020.

LONDON, May 11 (Reuters Breakingviews) - Concise insights on global finance.


DEALS BINGE. Bain Capital is larder-loading. The buyout group on May 10 announced it’s buying Valeo Foods, which owns brands including Rowse honey and Kettle crisps, for more than 1.7 billion euros, according to a source familiar with the matter, from CapVest. A string of acquisitions has boosted Valeo’s revenue to 1.1 billion euros in the year to March, from less than 200 million euros in 2010. Its new owner is set to extend the deals binge as consumer giants like Nestlé (NESN.S) and Unilever (ULVR.L) dump unfashionable foods.

Still, the purchase price is a punchy 10 times Valeo’s EBITDA, which is running at around 170 million euros a year, according to the Irish Times. Premier Foods (PFD.L), the owner of Ambrosia custard and Angel Delight dessert, trades at around 8 times EBITDA, according to Refinitiv. Despite a pandemic boost, Premier shares are at a fraction of their 2007 peak. It’s a reminder that gorging on unfashionable foods can lead to indigestion. (By Dasha Afanasieva)

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