Affinity Submits Final Bid for Primo Smallgoods

Buyout shop Affinity Equity Partners has submitted a final bid for Australian meat products firm Primo Smallgoods, Reuters reported Friday. Primo Smallgoods could reportedly fetch as much as $1 billion, and Affinity has arranged about $622 million in financing from 11 banks, Reuters reported.

(Reuters) – Private equity firm Affinity Equity Partners has submitted a final bid for Australian meat products firm Primo Smallgoods, in a deal that could value the company as high as $1 billion, a source with direct knowledge of the matter told Reuters on Friday.

Pan-Asia buyout shop Affinity put in the bid last week, backed by financing of about A$580 million ($622 million) from 11 banks, the source said.

Affinity is aiming for a controlling stake in Primo, and wants to keep the family in the business, the source added. Primo had an earnings before interest, tax, depreciation and amortisation of A$104 million.

Family-owned Primo Smallgoods, which has contracts with Coles and Woolworths , has hired Macquarie Bank to run a dual-track sale and IPO process.

Blackstone Group , which submitted an indicative bid for Primo, did not meet the bid deadline, a separate source told Reuters.

A lack of private equity buyouts in Australia this year, traditionally the region’s biggest market for leveraged loans which back such deals, has generated strong support for Affinity’s bid, sources said.

Only A$451 million in leveraged buyout loans have been completed this year in Australia, according to data from Thomson Reuters LPC. At the height of the buyout boom in 2007, Australia had a record leverage finance loan of $9.9 billion in loans, making it the hottest market in Asia Pacific for LBOs.

Affinity had commitments from 15 banks for its bid, but the financing was oversubscribed and the firm cut the final group to 11, said the first source.

Blackstone has been active in bidding for Australian assets in recent months though it has met with challenges in some deals. The firm was still in discussions for a potential buyout of Australian aged care homes company Japara when bids on Primo went in last week, another source familiar with the matter said.

Affinity, Blackstone and Macquarie declined to comment.

The sources declined to be named because the discussions were not public.

(1$= 0.932 Australian Dollars) (Reporting by Stephen Aldred; Editing by Jacqueline Wong)