Lion Capital is to retain its stake in UK frozen food business Findus Group, having fought and successfully foiled an attempt by Triton Partners to take ownership of the company. Findus began facing difficulties in December which prompted Lion Capital to acquire part of its mezzanine debt at the turn of the year. Lion, along with Triton, proposed to take control fo the company in exchange for injecting more capital into the business.
Triton, which has specialised in northern European buyouts had hoped to take the business from Lion. Triton had proposed to pay down Findus’s full net debt which stands at around £800m, but this move would also wipe out the mezzanine investors as well Lion’s equity which would better reflect the poor state of the business.
Lion bought Findus for £1.1bn in 2008 from CapVest. It invested around £400m of equity when it acquired the company. It would have stood have lost the investment as well as its mezzanine investment had the senior lenders opted for Triton proposal.
Senior lenders voted on which restructuring plan to take forward, decisively rejected. Triton failed to convince the senior lenders which include Royal Bank of Scotland and Société Générale that it should assume control of Findus for around £300m.
Lion Capital, which owns both equity and some of the junior debt, is now to pump £150 million of capital with other creditors to retain control.
Lion will retain around a 30 per cent stake in Findus, with JPMorgan Chase and Highbridge Captial jointly owning around half of Findus in the exchange for £70 million of Findus’s debt being written off.
Lion has also discussed the possibility of selling better-performing parts of the business to order to generate liquid assets, naming the frozen food group, Birds Eye Iglo, owned by private equity firm Permira.