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Blackstone-backed Pinnacle Foods eyes $667m from IPO

15 Mar 2013

Birds-Eye-USBlackstone-backed Pinnacle Foods, the company behind the Birds Eye brand, has filed to raise up to $667m through an IPO to pay down the company’s debt.

Buyout giant Blackstone plans to reduce its stake in the business from 98 per cent down to about 70 per cent, or 68 per cent if the underwriters purchase their full allocation of shares.

Those underwriters are led by Barclays, Credit Suisse, Goldman Sachs, Morgan Stanley, Bank of America Merrill Lynch and UBS Investment Bank.

Blackstone bought Pinnacle for about $2.16bn in cash in 2007, adding Birds Eye Foods in a $1.3bn deal two years later. About $3bn of those deals was debt according to a prospectus filed with the US Securities and Exchange Commission.

It said the Pinnacle had managed to pay down about $350m of that debt since thanks to its cash flow – it had net sales of $2.5bn in fiscal 2012.

The company owns trademarks for brands including Birds Eye, Country Kitchen and Hungry-Man Steakhouse.

Pinnacle expects to sell its shares at between $18 and $20 each according to the prospectus.

It said the company intended to use the proceeds to redeem $465m of its 9.25% senior notes due in April 2015, with the remainder going towards paying off $86m of the $243.3m Tranche B Non-Extended Term Loans it had outstanding at the turn of the year.

The filing revealed Blackstone received $13.8m of management fees over the past three years.

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