United Biscuits seeks to split business

UK-based United Biscuits has hired Credit Suisse to separate the company’s salty snacks business from the rest of the business, as a part of their plan to sell the company in parts.

The snack business, valued at around £500m, is likely to attract interest from private-equity firms as well as rival food companies.

An auction of the salty snacks business may start within several months, but the sale of the rest of the business, which is expected to fetch nearly $1bn, is not likely to be initiated until 2013.

The snack business includes nearly 12 brands such as McCoy’s potato chips, Hula Hoops, Mini Cheddars and KP nuts, while the rest of the business sells products including biscuits and cakes, representing nearly two-thirds of the company’s sales.

The move to separate the snack business comes after United Biscuits’ owners, the US private equity firm Blackstone and the French buy-out firm PAI Partners, failed to sell the combined company for nearly £2bn in 2010.

In July 2010, Blackstone and PAI appointed JPMorgan and Goldman Sachs to sell United Biscuits, which attracted companies such as Kellogg’s, Kraft Foods, Campbell Soup and China’s Bright Foods.

However, the sale failed to materialise despite Bright Foods entering into exclusive talks over the acquisition that valued United Biscuits at £2.5bn, including debt.

United Biscuits, which was bought by Blackstone and PAI for £1.6bn in 2006, has 11 facilities in the UK and posted revenues of £1.3bn, and a net debt of £1.14bn in 2010.