CPE Capital plans to offload Gourmet Foods

Italian chocolate manufacturer Ferrero is being tipped as a contender to acquire CPE Capital’s cracker business Gourmet Foods.

Italian chocolate manufacturer Ferrero is being tipped as a contender to acquire CPE Capital’s cracker business Gourmet Foods.

Sales documents are now in the market for the business that sells gourmet crackers, chilled packaged seafood and sugar free business and so far, Ferrero and Arnott’s Biscuits owner, Kohlberg Kravis Roberts are deemed to be the most likely acquirers.

Gourmet Foods is understood to have been a strong performer for CPE Capital, previously known as Champ Private Equity, generating annual earnings before interest, tax, depreciation and amortisation of about $28m, according to its information memorandum, as it grows its export business to the US market.

Its brands include OB finest, Ocean Blue, Olina’s Bakehouse, Crispbic, Gullon and Clearly Premium.

The business was created by CPE Capital almost two years ago through the acquisition of MaxFoods and Fine Food Holdings and was the first investment by the Champ IV Fund in the food sector.

The private equity firm has had success investing in other consumer businesses, including Manassen Foods and Accolade Wines, which was sold to The Carlyle Group for $3.2bn last year.

CPE sold Manassen Foods to China’s Bright Food Group in 2011 for more than $500m.

Another food company that has returned to the market after it was put on the block a few years ago by KPMG is Sara Lee.

Working on the sale of Sara Lee by McCain Foods this time around is advisory firm Rothschild.

The business is believed to be forecasting strong earnings this financial year after generating about $15m of earnings before interest, tax, depreciation and amortisation for fiscal 2020.

While Patties Foods owner Pacific Equity Partners is seen as a logical buyer, it is understood to be side stepping the auction.

Others have been deterred by the premium ice cream component of the business, which is considered highly competitive, despite it only accounting for about 30 per cent of its revenue and desserts the remainder.

Competitors in the ice cream space include Bulla and Froneri, as well as Peters Ice Cream and Tip Top through a joint venture with Nestle.