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PE firm PAG gets Patties Foods, Vesco in $550m deal

Anthony Macdonald, Sarah Thompson and Kanika Sood

Sep 14, 2022 – 5.11pm

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Four’N Twenty pies maker Patties Foods and Lean Cuisine owner Vesco Foods are both headed for another stint in private equity, courtesy of Asia-based bigwig PAG.

It is understood PAG will sign deals to acquire both companies as early as Thursday, after agreeing terms with their respective owners Pacific Equity Partners and Catalyst IM.

PEP invested in Patties Foods in 2016, when it backed the company’s takeover.

The two-headed deal would see PAG instantly become a major player in the frozen section of Australian supermarkets, offering everything from pies to frozen desserts and ready-to-eat meals.

The combined business is expected to be worth about $550 million, in what is the Lincoln Pan-led PAG’s biggest deal in Australia to date.

It’s another significant Australian deal for PAG, which owns Oporto and Red Rooster parent Craveable Brands, convertibles notes at airline Regional Express, and equity in office design and fitout group Unispace.

Morgan Stanley, Gilbert + Tobin and EY advised PAG, while Goldman Sachs and Allens sold Patties Foods and Allier Capital and Hogan Lovells tended to Vesco’s owners. Sources said the deals were both agreed and ready for signing.

Street Talk revealed PAG’s interest in Patties Foods and Vesco last month.

PEP bought Patties Foods off the ASX boards in September 2016, when the company was making about $245 million in annual revenue and $20 million pre-tax profit. Funds run by PEP are understood to own about 75 per cent of the equity, while the founding Rijs family has the bulk of the rest. It reported $436 million revenue in the 2021 financial year.

Vesco, meanwhile, sells ready-to-eat meals under brands including On The Menu, Super Nature, Lean Cuisine and Annabel Karmel. It was acquired by Catalyst in 2013 from another PE firm, CHAMP Ventures, and quickly merged with Queensland’s Prepared Foods Australia to create a national group.

Anthony Macdonald is a Chanticleer columnist. He is a former Street Talk co-editor and has 10 years' experience as a business journalist and worked at PwC, auditing and advising financial services companies. Connect with Anthony on Twitter. Email Anthony at a.macdonald@afr.com

Sarah Thompson has co-edited Street Talk since 2009, specialising in private equity, investment banking, M&A and equity capital markets stories. Prior to that, she spent 10 years in London as a markets and M&A reporter at Bloomberg and Dow Jones. Email Sarah at sarah.thompson@afr.com

Kanika Sood is a journalist based in Sydney who writes for the Street Talk column. Email Kanika at kanika.sood@afr.com.au

PE firm PAG gets Patties Foods, Vesco in $550m deal

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