Private equity firms target big Australian food producers for investment
After years of avoiding the sector because of the risks associated with primary production, private equity firms are shifting their focus and looking toward Australian agriculture and food companies because of the increase in demand from the growing middle class in Asia. A Grant Thornton study which has been tracing merger and acquisitions in Australia’s food sector for three years has reported increased activity. Between January 2011 and March 2014 private equity buyers accounted for 14% of all Australian mergers and acquisitions; notable deals including Europe’s R&R, which is owned by French Private Equity firm PAI Partners, buying ice cream company Peters for $400 million, and U.S.-based private equity firm Kohlberg Kravis Roberts (KKR) bidding $3.05 billion for Australia’s Treasury Wine Estates. In June 2013 TPG Capital bought Ingham Enterprises, for $880 million and in April of 2013 Hong Kong-listed Chevalier International Holdings bought control of Moraitis Group for $212 million. Buyers showed particular interest in packaged food companies and meat companies with strong brands and distribution companies.
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