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Blackstone, PAI to sell KP Snacks to Germany’s Intersnack

5 Dec 2012

Global buyout firms Blackstone and PAI Partners have reached a deal to sell the savoury snacks arm of UK food giant United Biscuits to German trade buyer Intersnack for a reported value of £504m.

The news ends a hotly contested sale process that is understood to have drawn bids from private equity heavyweights including Lion Capital, CapVest and Pamplona Capital.

KP Snacks is the number two snack manufacturer in the UK and is famous for iconic brands including McCoy’s, Hula Hoops, KP Nuts, Space Raiders, Nik Naks, Wheat Crunchies, and Skips.

With annual EBITDA of £60m on turnover of £280m, the unit is said to be the more attractive part of United Biscuits, and has shown consistent top and bottom line growth over the last five years.

The company, which employs about 1,500 people, will be combined with Intersnack to create a snacks powerhouse with combined net sales of more than £1.7bn and 8,000 employees.

Intersnack’s UK arm focuses solely on the savoury snack market, producing brands including Pom-Bear, Penn State and Percy Dalton’s and generating a turnover of about £80m.

United Biscuits were advised on the deal by Credit Suisse and Freshfields Bruckhaus Deringer.

KP Snacks were advised by Centerview Partners, while Goldman Sachs, Ernst & Young and McDermott, Will & Emery are acting as advisors to Intersnack Group.

The acquisition will be funded with a combination of shareholder equity and fully underwritten bank debt, provided by Commerzbank, HSBC Trinkaus & Burkhardt, HSBC and UniCredit.

Banks are understood to be offering debt packages of up to £300m to finance the deal.

Blackstone and PAI bought United Biscuits in 2006 for £1.6bn.

The pair tried to sell the company two years ago, but shelved the auction after bids from parties including China’s Bright Food failed to meet their target price.

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