Private Equity Firm KKR Snaps Up Campbell’s International Business for $2.2 billion

July 24, 2019 | News, Private Equity
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The deal an outcome of a nearly year-old auction process

Some people are asking: Did KKR buy Campbell Soup?

Well, it turns out that the private equity giant did complete a deal with the famous buyout firm. However, the deal had nothing to do with Campbell’s North American operations.

KKR recently beat Australian rival Pacific Equity Partners to acquire Campbell Soup’s international business including Arnott’s biscuits. But it wasn’t cheap. The deal is worth $2.2 billion, a figure that is 13.5 times 2019 EBITDA.

Arnott’s clocks up annual sales of $737 million. Other brands in the international portfolio include Tim Tams, Mint Slice, and Shapes.

The snacking brands are found in markets including Australia, New Zealand, Indonesia, Malaysia, Singapore, Hong Kong and Japan. The company has manufacturing operations in Australia, Indonesia and Malaysia.

Did KKR Buy Campbell Soup Australia?

Arnott’s has largely generated the bulk of Campbell Soup’s international sales. The Australian biscuit brand had been around for more than 150 years, while Campbell Soup launched in 1869.

KKR’s deal features a long-term licensing arrangement and exclusive rights to certain Campbell brands and IP. The exclusive list of brands includes Campbell’s, Swanson, V8, Prego, Chunky and Campbell’s Real Stock, in Australia, New Zealand, and Malaysia. The agreement provides certain rights in several other markets across Asia Pacific, Europe, the Middle East and Africa.

KKR busy in Australia

It’s worth noting that KKR famously completed a leveraged buyout of biscuit maker RJR Nabisco, in the late 1980s. That deal made KKR a legendary LBO shop.

Of course, KKR hasn’t just conducted deals in the United States. The firm has remained busy in Australia over the last decade, much like the broader sector.

Pitchbook reports that KKR has conducted 30 PE transactions in Australia since 2010. Meanwhile, private equity firms had increased its dealmaking in Australia, before a slowdown in 2018 extended into this year. According to Pitchbook, firms have completed fewer than 40 deals since the beginning of the year.

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