UNITED BISCUITS yesterday struck a deal to sell its subsidiary KP Snacks, the maker of Hula Hoops crisps, to Germany’s Intersnack, in a deal valued at around £500m.
Blackstone and PAI Partners, the private equity owners of United Biscuits, put their salty snack division up for sale earlier this year, attracting interest from both rival private equity firms and snack makers.
The sale to the German owner of Pom-Bear crisps and Penn State pretzels will allow PAI and Blackstone to at least achieve a partial exit after failing to sell the whole of United Biscuits two years ago.
The KP Snacks deal shows how private equity houses are increasingly breaking up their largest companies, bought at the height of the buyout boom, because they cannot find takers for the whole business due to the uncertain economic outlook.
Blackstone and PAI bought United Biscuits in 2006 for £1.6bn. In 2010, they were forced to halt the sale of the business in its entirety to Bright Food Group after the Shanghai company failed to follow through with its £2.5bn indicative offer.
Blackstone and PAI will retain control of the larger biscuits division which owns McVitie’s biscuits and Jacob’s Cream Crackers. It has a 30 per cent share of the UK’s biscuit market and generates some €180m (£146m) in earnings.
Maarten Leerdam, Intersnack’s chairman, said he would take a long-term view: “The joint know-how of KP Snacks and Intersnack will drive the development of these iconic brands.”
Freshfields Bruckhaus Deringer and Credit Suisse advised United Biscuits on the sale of its savoury snacks arm.
Freshfields’ advisory team was led by Sundeep Kapila, a corporate partner and specialist in public and private mergers and acquisitions, demergers and joint ventures.
He is also Freshfield’s global relationship partner for a number of key clients including Deutsche Bank, Heineken, United Biscuits and Discovery Holdings.
Kapila, who has been a partner at the law-firm since 1999, has acted for Deutsche bank on a number of M&A transactions including the disposal of certain of its UK asset management businesses as well as its £977m acquisition of Lloyds Abbey Life and its investment in the Paternoster Group.
He also advised on the bail-out of Northern Rock at the height of the crisis.
KP Snacks was advised by Centerview Partners. Intersnack Group was advised by Goldman Sachs, Ernst & Young and McDermott Will & Emery.