Asian private equity firm snaps up Four’N Twenty maker Patties Foods

Patties Foods, the maker of Four’N Twenty and Lean Cuisine, has been sold for an undisclosed sum to Asian private equity group PAG.

Asian private equity group PAC has acquired Four’N Twenty and Herbert Adams maker Patties Foods for an undisclosed sum.

PAG’s acquisition of Patties and Vesco Foods, which also owns Lean Cuisine, expands its snack food offering after it bought Red Rooster, Oporto and Chicken Treat in a $500m deal three years ago.

Patties has been one of Australia’s most iconic foods, with the company engaging cartoonist Peter Nicholson to produce an advertisement featuring his rubbery figures - which included puppets of Bob Hawke, Mikhail Gorbachev, Margaret Thatcher and others - 30 years ago.

Four’N Twenty Pies has since become the southern hemisphere’s biggest pie brand and

has even expanded into the US, signing a deal with NBA team Philadelphia 76ers in 2017.

It is also sold in Japan, Singapore, Hong Kong, Taiwan.

Patties was delisted from the ASX in early 2016 after Pacific Equity Partners acquired it for $232m and in recent months PEP has been working with Goldman Sachs on its exit plan.

Four'N Twenty maker Patties Foods is now owned by Asian private equity firm PAG.

After speculation that Indonesia conglomerate Salim was actively pursuing the Patties business, PAG emerged the victor. The terms of the deal were not disclosed, but it had a price tag of at least $400m under previous expectations.

PAG managing director Sid Khotkar said the acquisition “enhances the strength of our business in Australia and New Zealand”.

“We are excited about this unique opportunity to take some of Australia and New Zealand’s best-loved brands to the next level,” Mr Khotkar said.

“Over the past few years, PAG has had the privilege of working with several leading Australian companies, and we are looking forward to putting that expertise to work in support of Patties and Vesco, and helping them provide the highest quality products to consumers across Australia, New Zealand and beyond.”

While Patties initially took a hit at the onset of the pandemic after its sales at sport grounds, including the MCG where it supplies Four’N Twenty pies, were disrupted, it has made up ground from the wave of at-home consumption.

Food manufacturers selling products in supermarkets have had a couple of bumper years as consumers have been forced to stay home during pandemic-related lockdowns.

Patties is understood to have recently generated between $60m and $70m of annual earnings before interest, tax, depreciation and amortisation. Other brands in its 50-year-old portfolio include Boscastle, Nanna’s and Leader.

The pie brand expended into the US and struck a deal with the Philadelphia 76ers.

Patties chief executive Paul Hitchcock said: “PAG’s acquisition of Patties Foods is a clear sign that it believes in our business, people and long-term growth strategy”.

“It is recognition of our reputation as a highly respected food manufacturer in Australia and New Zealand with a long list of loved food brands. The acquisition presents a significant opportunity for Patties Foods, unlocking further investment into market leading innovation, well-known brands and manufacturing capabilities.

“We also very much look forward to working with the Vesco team post completion to best serve our customers.”

Vesco chief executive Bernie Pummell also had high hopes of PAG’s takeover.

“This is an exciting development and a significant step forward for Vesco Foods. We are a focused ready-meals manufacturer, with leading brands and a strong track record of growth and innovation in the category,” he said.

“PAG is well placed to support Vesco and its partners in the future, not only to build on Vesco’s success to date, but also to enable new exciting opportunities through the combination of Patties and Vesco.”

Originally published as Asian private equity firm snaps up Four’N Twenty maker Patties Foods