This week is shaping up to be big for Australian-based private equity firm CPE Capital, which is expected to announce a $2.3bn-plus acquisition of Bingo Industries after selling its Gourmet Food business.
The John Haddock-run CPE has finalised a deal to sell its Gourmet Food business to global snack company Mondelez International for between $400m and $450m.
Now Bingo remains the focus.
Sources are tipping that a deal to buy the waste disposal company Bingo Industries in conjunction with Macquarie Infrastructure and Real Assets is set to be announced within days.
Some are betting the consortium will offer somewhere between $3.50 and $4 per share.
It comes after the pair finished due diligence on Bingo in recent weeks. They have been locked in negotiations with the company’s board over price.
The understanding is that to gain approval from the competition watchdog to buy Bingo, CPE will sell its waste recycling centre at Sydney’s Banksmeadow that it purchased in 2019 for $50m.
The asset was purchased by CPE from Bingo following its $578m acquisition of the Dial-A-Dump business in 2018 to appease the Australian Competition & Consumer Commission.
Meanwhile, Mondelez is understood to have fended off competition from Pacific Equity Partners and Kohlberg Kravis Roberts in its quest to buy CPE’s Gourmet Food.
The two underbidders were understood to be PEP, which owns Patties Foods and KKR, which owns Arnott’s Biscuits.
The understanding is that KKR slowed its pace in the auction after it became distracted by its recent acquisitions of Freedom Foods’ cereals division and the Diver Foods business.
The key question now is whether KKR’s Arnott’s targets cereal manufacturer Carman’s Kitchen, with some expecting that the cereal maker could soon come up for sale.
Gourmet Food generates about half of its revenue from the sale of chilled packaged seafood while the remainder comes from gourmet crackers and sugar-free biscuits.
Some expect that Mondelez, which sells Oreo biscuits and Ritz crackers, will offload the packaged seafood operations, given that it is not its core business.
Its brands include OB Finest, Ocean Blue, Olina’s Bakehouse, Crispbic, Gullon and Clearly Premium.
Gourmet Food is thought to have been generating earnings before interest, tax, depreciation and amortisation of at least $28m.
The business was created by CPE Capital more than 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.
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