By Anousha Sakoui
(Reuters) -European buyout firm PAI Partners has raised 3.6 billion euros ($4.22 billion) worth of equity to bolster its Froneri ice cream venture with Nestle, it said on Thursday, bringing in Goldman Sachs and the Abu Dhabi Investment Authority.
Froneri controls ice cream brands including Haagen-Dazs, and competes with rival Unilever’s soon-to-be spun off unit Magnum. It has global revenues of $5.5 billion, PAI said in a statement.
The equity deal values the firm at some 15 billion euros including debt, a source with knowledge of the situation said.
Froneri was formed in 2016 as a 50:50 joint venture between Nestle and PAI unit R&R Ice Cream. It bought Nestle’s U.S. ice cream business in 2019 in a $4 billion deal.
PAI said a subsidiary of the Abu Dhabi Investment Authority would become a “significant minority co-investor” in Froneri alongside PAI and a new single-asset continuation vehicle led by Goldman Sachs Alternatives.
Continuation vehicles are a popular new tool for private equity firms to keep assets longer than the life of the funds they originally bought the asset with.
PAI said demand from investors for the continuation vehicle was oversubscribed, adding that it showed strong demand for investing in Froneri’s growth prospects.
“Froneri has an opportunity to further build on this performance by leveraging its established value-creation playbook, focusing on robust organic growth, operational efficiency and strategic market consolidation,” it added.
Nestle said: “We welcome the new investment in Froneri and the continued commitment of PAI Partners. Froneri is a successful joint venture that continues to delight consumers as a strong player in the ice cream category.”
At 1030 GMT Nestle’s stock was up 0.5%.
Bloomberg and the Financial Times previously reported the potential deal and Goldman Sachs’ interest.
($1 = 0.8521 euros)
(Reporting by Rhea Rose Abraham in Bengaluru, Tristan Veyet in Gdansk, Anousha Sakoui in London; Editing by Janane Venkatraman, Tomasz Janowski and Helen Reid)
