Permira to divest Iglo for €3bn

Frozen foods company Iglo, which owns Captain Birds Eye brand and the Italian unit of food company Findus, has been put up for sale for almost €3bn.

The sale process has been initiated after its owner Permira, a private equity firm, received unsolicited expressions of interest from several companies.

If Permira, which has appointed Credit Suisse to kick-start the auction, is successful in offloading Iglo, it will be one of the biggest private equity transactions of 2012.

However, bankers have warned that the divestment would be tough to complete and the equity firm may have to opt for a two-track method of initial public offering and sale.

The sale is expected to attract interest from private equity firms such as Blackstone, BC Partners and Cinven as well as from East Asian and Indian companies as they seek to explore growth opportunities in Europe.

Permira bought Iglo from Unilever for €1.7bn in 2006, following which the frozen foods company launched new products into several markets.

In 2010, the equity firm expanded the Iglo operations further with the acquisition of Findus Italy from Unilever for €800m.

The rest of the Findus business is based in UK and is owned by Lion Capital.

Iglo, based in UK, manufactures pea, poultry and potato waffle products and has food production sites in Remerhaven and Reken in Germany, Lowestoft in the UK and Cisterna in Italy.

The frozen foods company is expected to post earnings before interest, tax, depreciation and amortisation of €325m in fiscal 2011, while sales are likely to be above €1.1bn, helped by targeting new markets such as Russia and Turkey.

Iglo has been posting a profit increase of 8% every year since 2008.