Food and Beverage Business
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PAI Partners in discussions with investors for additional funding for Nestlé joint venture

PAI Partners in discussions with investors for additional funding for Nestlé joint venture Nestlé Food and Beverage Business

Private-equity firm PAI Partners is reportedly in discussions with investors for a new fund to house its 50% stake in the Froneri ice cream joint venture with Nestlé.

According to Bloomberg, PAI is collaborating with financial advisors on this potential move. This follows earlier reports in January that PAI was exploring options for the sale of its interest in Froneri.

Now, Bloomberg sources indicate that PAI is in talks with investors, including sovereign wealth funds, for a new continuation fund. The deal may value PAI’s stake in Froneri at approximately $10bn.

Froneri, a UK-based business established in 2016, includes the Nuii brand and licenses with companies like Mondelez. It is part of PAI’s Continuation Fund V, launched in 2019.

Buyout firms have increasingly turned to continuation vehicles amid decreased deal activity in recent years. These structures allow firms to retain ownership of portfolio companies beyond the typical investment cycle by transferring assets from older funds to new vehicles.

There is the possibility that the ongoing discussions could lead to a minority stake sale in Froneri. PAI declined to provide a comment when contacted, and Nestlé’s response to the Bloomberg story is awaited.

In 2013, PAI acquired UK-based R&R Ice Cream and later merged it with Nestlé’s ice cream operations to create Froneri. The transaction combined Nestlé’s and R&R’s ice cream businesses in various regions, excluding the US and Israel initially. However, Israel was brought under the Froneri umbrella in 2019 following Nestlé’s sale of its US ice-cream operations to Froneri.

Nestlé retained its ice-cream business in Canada, Latin America, and Asia. The food and beverage industry trend of consolidation through joint ventures and acquisitions is apparent in the formation and expansion of Froneri. This move reflects the ongoing evolution and competitiveness within the food and drink business sector, as companies strive to adapt to changing consumer trends and preferences.

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