ARYZTA is to make a strategic investment with Lion Capital in Picard, a speciality premium French food business.
ARYZTA values the enterprise at EUR2.25bn, based on estimated Fiscal Year End March 2015 run-rate revenues and adjusted run-rate EBITDA of EUR1.37 billion and EUR192 million respectively. Under the terms of the investment, ARYZTA would acquire a 49% shareholding in Picard for a consideration of EUR446.6 million, largely funded with the net proceeds from the Origin placement (EUR400m net of fees and taxes). Picard would be treated as an Associate and expected to make a net contribution of 3 per cent to EPS on an annualised basis, offsetting 50 per cent of the negative 6 per cent impact of the Origin placement.
ARYZTA would have the right to exercise a call option in three to five years to acquire 100 per cent of Picard. Picard is separately managed and separately funded with debt non recourse to ARYZTA. ARYZTA would have two seats on the Picard board. The investment would be conditional on limited conditions, including anti-trust clearance. Picard will consult its Works Council in connection with the investment.
Picard has market share leadership in speciality premium food in France with a 40 year track record of revenue growth, EBITDA growth and market share expansion. Picard operates an asset light, replicable model capable of transferring internationally.
Commenting on the investment Owen Killian CEO of ARYZTA, says: “The investment in Picard is consistent with ARYZTA’s strategy of consumer relevancy through diversifying markets and channel positioning. Picard has delivered consistent revenue, EBITDA and market share growth over the past forty years. It offers ARYZTA the future potential to acquire a highly successful business to consumer platform focused on premium speciality food, that complements ARYZTA’s business to professional platform. Picard is a highly predictable business and an ideal replacement for ARYZTA’s Origin holding and allows ARYZTA to strategically move up the value chain. We are delighted to partner with Lion Capital, a private equity firm with a leadership position in branded consumer goods and retail.”
Lyndon Lea, Partner of Lion Capital, says: “We look forward to partnering with ARYZTA during the next phase of our investment in Picard. Since our acquisition of Picard in 2010, we have worked closely with its management team to develop and grow the business. Lion is uniquely positioned to transform companies in such a way as to be viewed as attractive to strategic acquirers. This capability comes as a result of our expertise in the consumer sector as well as the depth and breadth of our relationships within the sector. We are extremely proud of our track record in nurturing outstanding businesses such as Picard and selling the overwhelming majority of our companies to dynamic strategic buyers. In Picard and ARYZTA we have a potent combination. We hold ARYZTA and its management in high regard and greatly look forward to this new chapter of expansion.”
