Findus Group targets selective acquisitions

12-Apr-2011 - Last updated on 14-Apr-2011 at 08:50 GMT

The Findus Group says it may well pursue “selective bolt-on acquisitions”, after it emerged that chilled and frozen foods giant’s owner is trying to renegotiate its banking covenants.

The Telegraph reported on Monday that Findus’ private equity owner Lion Capital spoke to its banking syndicate (led by JP Morgan) last week to ease leverage and cash-flow covenants, as it aims to free finances to fund an acquisition blitz.

Restructuring debt

Responding to the paper’s claim that the seafood and frozen food giant was seeking to create a £1bn “war chest” – with bankers due to vote on proposals in the next few weeks – a Findus Group spokesman told FoodManufacture.co.uk:

“What we will be doing is restructuring debt to provide the ability to expand, but this is likely to happen in a mainly organic way, with a few selective bolt-on acquisitions. That’s certainly a useful nuance to remember.”

Another industry source told FoodManufacture.co.uk that talk of a £1bn kitty is inaccurate, and the spokesman said: “Findus are looking to expand the business as a whole – it has a particularly strong business in Scandinavia and France."

Findus has also hit the acquisition trail in Europe, acquiring two Spanish brands last week: frozen vegetable brand Frudesa and ready meal brands Salto, both from French firm Bonduelle. It has also inked a deal to regain control of the Findus brand in Spain and Portugul from Ardo, which had produced products under licence.

Premium appeal?

In the UK Findus is best-known for products such as crispy pancakes and fish fingers, and recently renamed its UK operation Young’s Seafood in what appears to be a renewed group focus on seafood, where seafood sales comprise 70% by value.

Asked whether Findus was also seeking to broaden its UK appeal, beyond consumer perceptions that it only produces budget-priced ready meals, the spokesman said that some people in the UK did not appreciate Findus’ reputation for premium products in Scandinavia and elsewhere in Europe, which it was already providing cosumers here.

"What is obvious is that the Findus Group produces considerably more than fish fingers and pancakes”, he said.

Lion Capital bought Findus Group for £1.1bn from its private equity peer CapVest in 2008.