Australian Private Equity Firm to Buy Kerry's Pinnacle Business

10 Mar 2015 --- Australian private equity firm Pacific Equity Partners (PEP) has reached an agreement with Kerry Group Plc for the acquisition of Kerry’s local Australasian food manufacturing business, Pinnacle. At the end of last month, Kerry announced that negotiations on the sake were at an advanced stage, in relation to the sale of the lifestyle bakery business (annual revenue €160m).

Pinnacle has a leading position in the local baked products and bakery ingredients market, with 3,500 customers throughout Australasia, and is a major supplier to supermarkets, food service and bakery retailers. The company manufactures and distributes:
• Finished baked goods such as muffins, cakes, donuts, slices and profiteroles;
• Frozen and unbaked specialty products including pastries, cookies, scones, sausage rolls, bagels and pastry shells; and
• Fillings and ingredients such as bakery mixes, fillings and fondants.

Pinnacle has been manufacturing in Australia for over 25 years and has a reputation for outstanding product quality and innovation. The company holds strong market positions in the grocery and non-grocery channels.

PEP Managing Director, Mr Jake Haines, said: “We are excited to have the opportunity to partner with the Pinnacle team. They proudly oversee a very successful business, and we look forward to working with them to drive further growth through strategic investments and continued innovation to best serve Pinnacle’s valued client partners.”

PEP Managing Director, Mr Tony Duthie, said: “Pinnacle is an excellent business and it is a privilege to have this as the first portfolio company in our fifth fund. PEP has a strong track record of investing in consumer products businesses and supporting local management teams to deliver growth. Some of our recent consumer products investments have included Peters Ice Cream, Asaleo Care, Griffins biscuits and Tegel.”

Pinnacle Chief Executive, Mr Keven Doyle, said: “Pinnacle has built a reputation for high quality products and excellent service. Under local ownership and with the benefit of both PEP’s expertise and capital, I believe there will be many opportunities for us to continue to improve and grow all aspects of our business.”

The transaction is expected to close in May 2015.

The food sector has proven successful for PEP as Australian suppliers benefit from growing demand throughout Asia. In 2014, PEP sold Peters Ice Cream to British dairy giant R&R Ice Cream Plc for a reported A$450 million, doubling its money in two years. It also sold New Zealand snack maker Griffin's Foods Ltd to Philippine-based Universal Robina Corp for A$514.3 million, also doubling its money in eight years.

Last month Kerry reported 2014 group revenue of €5.8 billion reflecting 2.4% continuing volume growth. Ingredients & Flavours (€4.3 billion) was up +3.4% on continuing volumes, while Consumer Foods (€1.5 billion) was down -0.7% on continuing volumes.