© Refresco/Richard Sinon
Refresco has agreed a revised €1.623 billion offer from a private equity consortium including PAI Partners.
Along with British Columbia Investment Management (bcIMC), PAI will press ahead with an offer of €20 per share in Refresco, representing a premium of approximately 22% on the average closing price since Refresco bought Cott’s bottling operation in July.
Refresco’s major shareholders and members of the board with a stake in the company have all agreed to sell their respective interests, disposing of around 26.5% of Refresco, while the bottler will ‘unanimously recommend the offer’ to its remaining shareholders.
Hans Roelofs, CEO of Refresco, said: “This offer represents a fair value for our shareholders and is yet another milestone for the company. The consortium fully supports our strategy [to buy and build] and with its track record, financial strength and understanding of our business, they can support the company whilst we accelerate our growth plan going forward.”
PAI Partners returned with a €1.6 billion offer at the beginning of October, having had a €1.4 billion bid firmly rebuked in April. Refresco’s apparent willingness to negotiate this time round was a promising sign that a deal may be forthcoming, and management have now paved the way for a takeover.
The rejection of PAI Partners’ initial bid may have been motivated by the Cott acquisition, which would have been in the pipeline at the time.
Roelofs defended Refresco’s decision to go public with shares two years ago, only to recommend a sale to PAI Partners now.
“Obtaining a public listing in 2015 was a well-considered decision and it has brought the company many opportunities,” Roelofs said. “However, we have also grown and prospered under private equity ownership. Our ownership structure is never a goal in itself. Rather, our focus remains on being in an environment that allows us to continue executing our proven strategy of buy-and-build.
“The first time PAI approached us was prior to our public listing in 2015. They have always been impressed by our business and performance, and the agreement reached today reflects the important steps Refresco has realised since the IPO. Our latest acquisition of Cott TB, creating the world’s largest independent bottler with leadership positions across Europe and North America, is a truly transformational acquisition right at the heart of our buy-and-build strategy.”
The bottler is in a completely different position now: the deal for Cott will significantly expand its presence in North America, and the prospects look good. Volume has risen: it was more than 600 million litres higher in the most recent quarter than in the fourth quarter of 2016, shortly before the first offer from PAI Partners, while revenue has moved beyond the €2 billion mark.
“We are convinced that this is a good transaction for the company and all stakeholders involved and we therefore recommend our shareholders to accept the offer,” Roelofs continued. “Our focus of growing alongside our customers in the markets where we currently operate and expanding geographically remains unchanged. I look forward to this new phase of private ownership, and for all our employees and customers to capitalise on the opportunities ahead of us.”
Frédéric Stévenin, managing partner at PAI, added: “Refresco is a high-quality business and an attractive consolidation platform in the beverage industry which we intend to fully support using PAI’s wealth of experience in the European food and beverage industry. We share the Refresco management team’s overall vision for the group and we are excited by the opportunity to work with them and the team at bcIMC to realise its potential.”
Analysis: Who are PAI Partners?
Based in Paris, the private equity group claims to have assets under its management worth €7.1 billion and portfolio sales of €14 billion from around 20 European companies with global reach. It’s a former investor in Yoplait, United Biscuits and Chr. Hansen, while its current investments in the food and beverage industry include the ice cream manufacturer R&R. PAI Partners acquired the ice cream company in 2013 for €929 million with a view to turning R&R into one of the world’s leading ice cream companies.
As a result, the group has an interest in Froneri, the third largest ice cream player in the world and the result of a joint venture between R&R and Nestlé.
Until last year, it also held almost all the shares in Swissport, the largest ground and cargo handling company at airports around the world, before selling its stake to a Chinese group for $2.8 billion.
© FoodBev Media Ltd 2024