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Lion Capital eyes single-asset process for frozen-foods group Picard

  • Lion acquired Picard in 2010 from BC Partners
  • Hired Lazard to explore single-asset process
  • Aryzta bought stake in Picard in 2015

Lion Capital is considering selling French frozen-food retailer Picard out of older funds and into a new vehicle that would enable investors to get cash for the aging investment, three sources told Buyouts.

The process, known as a single-asset deal, has gained traction in the growing secondary market, especially as firms that would buy into such concentrated risk have raised huge pools of capital.

Lion hired Lazard as secondary adviser on the process, which sources described as still in its early days.

The firm, which focuses on consumer investments, holds Picard in both its second and third funds, its website shows. Whether the process would buy the Picard exposure out of both funds is unclear.

The firm also is considering a broader liquidity process for its third fund, which it closed on 1.5 billion euros ($1.7 billion) in 2010.

A spokesperson for Lion Capital declined comment. A spokeswoman for Lazard did not respond to a request for comment.

Lion acquired Picard in 2010 from BC Partners, which had bought the company in 2004 from Candover for more than 1.3 billion euros, Buyouts previously reported. Lion reportedly paid about 1.5 billion euros for the company, according to Reuters.

In 2015, Swiss/Irish food group Aryzta acquired an about 49 percent stake in Picard, the company said. At the time, Aryzta said it was negotiating to pay 446.6 million euros for the stake.

Aryzta CEO Kevin Toland said last year in an analyst call that the company overpaid for the stake in Picard. Aryzta began evaluating options for Picard in 2016, according to reports in Irish media.

Picard last year completed a dividend recapitalization to repay older debt and issue a 110 million euro dividend to shareholders, according to Fitch, which described the recap as “aggressive.”

Single-asset deals have proliferated in the strong fundraising and secondary market.

In the past, potential secondary buyers that might invest in such deals avoided them because of the concentration risk associated with buying into one deal, sources have said.

But firms have raised billions of dollars and are more open to assuming such risk, especially on assets owned by managers they know well.

Other such deals included Madison Dearborn’s stake in Asurion, which insures devices like cellphones; Hellman & Friedman’s Fund VI portfolio company Kronos, a cloud-based human resources software provider; and Lime Rock Partners’ fourth fund, which had most of its value in one company, Crownrock.

Action Item: Check out Lion Capital’s Form ADV here: https://bit.ly/2CM3QFX