Iglo's private equity owner, Permira, bought the business from Unilever in 2006 for £1.15bn. But now the private equity group has elected to take bids for the firm. Credit Suisse has been appointed to handle inquiries after Permira received a number of ‘unsolicited expressions of interest’, reports the FT.
And the Iglo owner could be about to make a sizeable return on its frozen food punt. With sales of above £920m predicted for 2011, Iglo seems like a pretty tasty morsel. It’s the largest frozen food company in Europe, and it’s still expanding: markets in Russia and Turkey beckon. So who’s going fishing? According to the Sunday Telegraph, buy-out firms Blackstone, BC Partners and Cinven are likely to enter the bidding.
If the business is sold, the focus will be on whether Iglo decides to keep its UK base. Iglo’s poultry products and potato waffles are currently produced in Lowestoft, Suffolk, where Birds Eye has been located for more than 60 years. But twice in the last decade there have been fears the company could leave the area: the first in 2003 after Birds Eye’s previous owner Unilever undertook an in-depth review of the business. The second in 2006 when Unilever put the brand up for sale.
Permira, which acquired Iglo, pledged to keep the Lowestoft factory. It also promised to retain its other UK base in Hull, where its famous fish fingers were made. But less than a year later it closed the Hull factory and moved production to Lowestoft and Bremerhaven in Germany.
The Lowestoft base has also been plagued by disputes in recent years. In 2010, Birds Eye ended its long standing contract with nearby Suffolk pea farmers after an Italian export deal was cancelled, affecting more than 180 farmers in the area.
So, while Iglo’s sale will be welcomed amongst buy-out firms, it could be met with a frosty reception in Suffolk…