KKR inks $2.2b deal with Campbell to acquire parts of its international operations

Photo: Campbell

Global private equity firm KKR has signed a stock and asset purchase agreement with Campbell Soup Company which will see the firm acquiring certain international operations from the latter for an enterprise value of about $2.2 billion.

In a statement on Friday, KKR said the portfolio which it acquired – Campbell International – includes snacking and meal brands in the Asia Pacific region with leading manufacturing capabilities and distribution channels in attractive core markets.

The development was first reported by The Australian Financial Review. KKR was said to have won an auction for Campbell International overnight, beating Australian rival Pacific Equity Partners.

The majority of Campbell International’s sales are generated by its business centerpiece – Arnott’s, the iconic Australian biscuit brand with over 150 years of heritage, which Campbell acquired in 1997.

Campbell International also comprises the regional portfolio of Campbell brands spanning soup, stock, juice and ready meals in markets including Australia, New Zealand, Indonesia, Malaysia, Singapore, Hong Kong and Japan.

KKR will also acquire Campbell International’s manufacturing operations in Australia, Indonesia and Malaysia. The investment is made primarily through the private equity firm’s core investments strategy, which represents capital targeting longer-term opportunities.

The deal is expected to close in the next six months subject to customary closing conditions.

Under the terms of the agreement, KKR and Campbell will enter into a long-term licensing arrangement for the exclusive rights to use certain Campbell brands, including Campbell’s, Swanson, V8, Prego, Chunky and Campbell’s Real Stock, in Australia, New Zealand, Malaysia and other select markets in Asia Pacific, Europe, the Middle East and Africa.

“Campbell International represents a unique portfolio of iconic brands that are known and loved by consumers in Australia and across the world. We are privileged and excited to have the opportunity to invest in and grow Arnott’s as an independent business in Australia, in addition to further developing Campbell’s trusted brands across the broader Asian market,” said KKR member David Lang.

In a recent earnings call, KKR co-president and co-CEO Scott C. Nuttall said the buyout major plans to start raising its next Asia-focused private equity vehicle in the next six to 18 months.

The next Asia fund, along with an Americas PE fund and an infrastructure vehicle, will be KKR’s three largest vehicles, said Nuttall. The firm’s last Asia PE vehicle mopped up some $9.3 billion in 2017 – the largest buyout fund in Asia until Hong Kong-based Hillhouse Capital closed its latest fund at $10.6 billion last September.