Permira wins frozen foods

Unilever has announced that it had reached an agreement to sell the majority of its European frozen foods business to US-based private equity firm Permira for €1.725bn (US$2.2bn).

The deal, which is subject to regulatory approval and a consultative process with the relevant employee works councils, is expected to be complete before the end of the year.

The sale includes the total frozen food portfolio under the Iglo and Bird’s Eye brands in Austria, Belgium, France, Germany Greece, Ireland, Netherlands, Portugal and the UK. Unilever will retain its frozen food business under the Findus brand name in Italy.

The operations sold achieved turnover of €1,237m and Ebitda of €174m in 2005. The consideration represents multiples of 1.4x annual sales and 9.9x Ebitda. Unilever expects the sale to result in a one-off profit after tax in excess of €1bn.

Goldman Sachs is managing the auction for Unilever’s Birds Eye and Iglo frozen foods brands.

Unilever’s chief Patrick Cescau confirmed to the market in February that Unilever would sell its underperforming frozen foods businesses, but hang on to its Italian frozen food division operating as Findus.

Such a move had long been expected, with Unilever having appointed Goldman Sachs to review the possibilities for the frozen foods division in August 2005.