Pacific Equity Partners acquires Allied Mills

Private equity fund manager Pacific Equity Partners (PEP) has acquired Allied Mills, a leading manufacturer of bakery products, from GrainCorp and Cargill Australia.

According to a statement the Sydney-based fund manager issued on Tuesday, Allied Mills will be integrated with Pinnacle Bakery and Integrated Ingredients, a sweet bakery products manufacturer PEP acquired in June 2015 from the Kerry Group of Ireland.

GrainCorp, in a separate statement, said it was selling its 60 percent stake for A$190 million ($144.2 million; €133.6 million), before tax and transaction costs, equating to an enterprise value for Allied Mills of A$455 million. GrainCorp’s joint venture partner Cargill Australia sold its 40 percent stake for an undisclosed sum.

“This is a rare combination of complementary businesses operating in truly adjacent categories,” PEP managing director Tony Duthie said. “PEP has a proven track record of investing in consumer product businesses and we intend to invest significantly to grow and support the integrated business.”

Headquartered in Huntington, New South Wales, Pinnacle employs 1,200 people and operates across five manufacturing facilities and nine distribution centers. The Allied Mills acquisition will add a staff of approximately 850 as well as 15 manufacturing sites and distribution centers to Pinnacle.

Allied Mills managing director Joseph Di Leo was quoted in a statement from Pinnacle as saying: “It’s an exciting time for the sector and with PEP committed to investing in the combined company’s strategic assets, there is very solid growth potential.”

PEP is realizing the acquisition, expected to close in two to three months, through PEP Fund V, a vehicle that closed in September 2015 at the hard cap of A$2.1 billion.

The largest private equity fund in Australia and New Zealand, PEP has significant experience in consumer foods, having owned and expanded businesses including Peter’s Ice Cream, Tegel, Griffins Foods, Manuka Health and Frucor Beverages.

According to its website, PEP has approximately A$3.5 billion in equity funds under advisement, and has made more than 26 operating company investments and more than 90 bolt-on acquisitions through its funds.

Last November, it acquired New Zealand’s Leader Products, a manufacturer of frozen convenience food products, as a bolt-on acquisition to Patties Foods, another frozen foods manufacturer PEP bought in September 2016.