PE-Owned Collins Foods Plans $250M IPO

Australian fast-food company Collins Foods, which is owned by private equity firm Pacific Equity Partners, is planning a $263 million initial share offering, Reuters reported. Deutsche Bank and UBS have been appointed as joint lead managers for the IPO. Collins Foods manages more than 380 KFC and Sizzler franchises.

(Reuters) – Australian fast-food group Collins Foods, owned by private equity firm Pacific Equity Partners, has decided to test the market for an initial share offering worth about A$250 million ($263 million), a source told Reuters on Friday.

Deutsche Bank (DBKGn.DE) and UBS have been appointed as joint lead managers for the float and analysts have begun premarketing the deal to investors, the source with direct knowledge of the situation said.

The source declined to be named because the matter was not yet public.

A fund manager said he had seen the pre-marketing documents, but also declined to be named because the documents had not yet been made public.

Although there have been few initial public offerings this year because of weak equity markets, Collins is seen as a defensive business that can do well in a weaker economy and would be one of the largest floats in the country this year.

Collins manages all 119 KFC outlets in the fast-growing state of Queensland and 26 Sizzler restaurants around Australia, and operates or franchises more than 260 Sizzlers worldwide, according to its web site. PEP bought in in 2005.

The decision to pursue an IPO was prompted by the highly successful sale earlier this month of a larger rival fast-food chain, Quadrant Private Equity’s Quick Service Restaurants to Archer Capital for A$450 million, the source said. Quadrant made a threefold return for investors on that deal. For details, see

Revenues for Collins are over A$400 million and sales growth for 2012 is forecast at 5 percent, according to the fund manager.

PEP, one of Australia’s four largest buyout firms, owns around half of Collins, with the remainder held by management and staff.

Pacific Equity Partners, Deutsche Bank and UBS declined to comment. (Reporting by Victoria Thieberger; Editing by Ed Davies)