In a year when cash-outs of private equity firms' investments have been rare, Vestar Capital Partners Inc. managed to score one, selling Birds Eye Foods to a portfolio company of Blackstone Group.
Pinnacle Brands Corp. on Nov. 19 announced it was buying Birds Eye from Vestar for $1.3 billion, providing the midmarket private equity firm with an exit from its investment in the frozen foods company. When the deal closes — expected no later than the first quarter of 2010 — Vestar plans to return capital to investors, said Carol Makovich, spokeswoman for the New York private equity firm.
Vestar bought a controlling interest in Birds Eye's former parent firm seven years ago for $175 million. Vestar executives declined to say what the return is on the Birds Eye investment. They would say only that the investment was “highly successful,” according to Ms. Makovich.
Executives also remain mum on on their exact ownership interest, but SEC documents reveal Vestar owns about 55%; Pro-Fac Cooperative Inc., a farmers cooperative, owns 40%; and Birds Eye management owns 5%.
Birds Eye significantly improved its market position under Vestar's ownership, said Kristin Celauro, another Vestar spokeswoman.
In 2007, the company ditched the name Agrilink Foods Inc. in favor of the name Birds Eye — one of its main brands —and sold off its non-branded frozen vegetable business. — Arleen Jacobius