United Biscuits prepares for snack division sale

The owners of British food company United Biscuits are expected to initiate the bidding process for the sale of its salty snacks division by September 2012. US food company Kellogg, German snack company Intersnack as well as several other food companies and private equity firms are likely to bid for the unit, which is valued at around GBP 500 m. According to press reports, Swiss financial services company Credit Suisse will run the sale, and the auction process is likely to involve two rounds of bidding. The owners US private equity group Blackgroup and French buyout firm PAI Partners are yet to hold negotiations with potential bidders over the sale.

The move to sell the United Biscuits' salty snacks division comes after Blackstone and PAI Partners failed to sell the combined company for nearly GBP 2 bn in 2010. The British food company, bought by Blackstone and PAI for GBP 1.6 bn in 2006, has 11 facilities in the UK and posted revenues of GBP 1.3 bn, with a net debt of GBP 1.14 bn in 2010. It was formed in 1948 after the merger of the two Scottish firms McVitie & Price and MacFarlane Lang. United Biscuits' snack business includes about 12 brands such as McCoy's potato chips, Hula Hoops, Mini Cheddars and KP Nuts, while the biscuits unit sells products including biscuits and cakes, representing nearly two-thirds of the company's sales.