Blackstone chomps on $1.3B deal for Birds Eye

Posted Nov 19th 2009 12:40PM by Tom Taulli
Filed under: Private Equity, Blackstone Group L.P (BX)

Controlled by the Blackstone Group (BX), Pinnacle Foods is a packaged foods company whose brands can be found in about 80% of the households in the U.S. The portfolio includes Duncan Hines baking mixes and frostings, Vlasic pickles and Swanson frozen dinners.

Well, Pinnacle will get even bigger; that is, the company -- along with the financing from Blackstone -- will purchase Birds Eye Foods for roughly $1.3 billion. There will also be debt financing from Barclays Capital (BCS), Credit Suisse (CS), BofA Merrill Lynch (BAC), HSBC and Macquarie Capital.

Birds Eye has a storied history, which goes back to the work of Clarence Birdseye. He invented a freezing process that preserved food safely but also kept its taste and appearance. Actually, he got some of his ideas from Eskimos.

Now, Birds Eye is top player in the high-qualify frozen foods market, with a strong distribution footprint. From 2005 to 2009, revenues grew from $636 million $936 million. It certainly helps that the company has a health-conscious approach.

Interestingly enough, Birds Eye recently filed for an IPO but it will be withdrawn. Yet, it's a good bet Blackstone will try to bring the combined Pinnacle-Birds Eye company back to the public markets sometime next year.

Tom Taulli is the author of various books, including The Complete M&A Handbook.

Tags: Birds Eye Foods, Blackstone, BX, Pinnacle Foods