Blackstone, Affinity Eye Bids for Australian Meats Firm

Reuters

Blackstone Group LP (NYSE:BLK) and Affinity Equity Partners are among private equity firms interested in buying a 50% stake in Australian meat products specialist Primo Smallgoods, sources with direct knowledge of the matter told Reuters on Friday.

A sale of the whole company, which makes meat products and has major contracts with supermarkets Coles and Woolworths Ltd , could be worth up to A$900 million ($950 million), sources previously told Reuters.

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The potential deal comes at a time when the Australian private equity market has seen a string of secondary buyout deals in recent weeks. Australian firm Archer Capital purchased Quick Service Restaurant Holdings earlier this month, the biggest Australian-owned fast food operator, for $474 million.

That purchase, from Quadrant Private Equity, was Archer's third in six weeks and took its total spending spree to more than A$1 billion, following the purchase of motor sport race group V8 Supercars Australia and private hospital operator Healthe Care from CHAMP Ventures.

Possible buyers of Primo Smallgoods' stake are now looking at the asset again, and actively working on bids for around 50 percent of the company, three sources told Reuters. First round bids are expected in around three weeks, two of the sources said.

Affinity is working with as many as 12 banks on a financing package to back its potential bid, two sources said.

The company hired Macquarie Capital to run a dual-track IPO and sale process earlier this year, and approached around 10 potential bidders including seven private equity firms and three strategic bidders, sources said.

At that time, buyers were looking to buy the whole company, but sources said the process went on hold as Primo resolved its internal shareholding.

Blackstone has been active in bidding for Australian assets in recent months though it has met with challenges in some deals. The board of services firm Spotless Group rejected a A$657 million bid from Blackstone last month.

The firm also narrowly failed to come to agreement on valuation for aged care homes company Japara, according to a source with direct knowledge of the matter.

However, Blackstone bought nearly 600 U.S. shopping malls from Australia's debt-laden Centro Properties for $9.4 billion in one of the biggest global property deals since the credit crisis earlier this year. .

Blackstone, Affinity and Macquarie were not immediately available for comment. Sources declined to be named as they were not authorised to speak to the media.