CCMP Capital Asia, a private equity firm previously known as JPMP Asia, is among several bidders losing interest in the auction for French group Danone’s Australian and New Zealand beverage business Frucor.
The former Asia-focused fund of JP Morgan Chase’s buyout arm, JP Morgan Partners, which spun out in 2005, has quit the auction for Frucor Beverages, which has an expected price tag of up to A$800m (US$652m) and whose assets include the Pepsi franchise in New Zealand.
Reports suggest that other private equity investors may go the same way. A consortium comprising Kohlberg Kravis Robers, Merrill Lynch Private Equity and P&N Beverages, a privately-owned non-alcoholic and non-dairy beverage company, are reportedly losing interest.
CCMP Capital Asia’s withdrawal forces its own consortium partner, Sydney-based private equity house Pacific Equity Partners, to decide whether to pursue Frucor alone, find a new co-investor or pull out of the race.
A private equity withdrawal would be a boon for trade buyers, which are expected to include Australia’s Coca-Cola Amatil, Japan’s Kirin, Asahi and Suntory, as well as Asian soft drink bottlers Fraser & Neave and Serm Suk.
CCMP Capital Asia’s only current drinks investment is Independent Liquor, a manufacturer and distributor of alcoholic beverages in New Zealand, in which Pacific Equity Partners is also an investor. The firm’s other Australasian portfolio companies include air-conditioning business Air International, automotive aftermarket parts producer Repco, cleaning appliance business Godfreys (also a PEP portfolio company), New Zealand’s Yellow Pages Group and industrial services business Waco.
If Pacific Equity Partners is eventually successful, it will be its second investment in Frucor Beverages, which it originally acquired in 1998 and floated in 2000 before selling the business to Groupe Danone in 2002. Its Mizone and V brands, as well as the Pepsi New Zealand franchise, were pioneered under PEP’s previous ownership.
Merrill Lynch Private Equity’s key play in the drinks sector was its investment in pub operator Spirit Group alongside Texas Pacific Group, The Blackstone Group and CVC Capital Partners in 2003 for an undisclosed sum. The business was sold to Punch Taverns in December 2005 for £2.7bn. Its other retail investments include UK high street store Debenhams in the UK.
KKR has no current investments in the beverages sector. Its Australasian investments include Australian media business Seven Media Group, and waste services business Cleanaway, bought from Brambles for US$1.83bn in July 2006 and sold to Transpacific Industries Group for US$1.25bn the following May.
By Robert Venes
Source: Thomson Merger News