Bloomberg reported private equity groups were in talks with Kuwait Food Company, which trades as Americana, to purchase the stake of its current largest shareholders the Al Kharafi family. The groups included KKR & Co, TPG Capital, CVC Capital Partners and Advent International Corp, along with two other unnamed parties.
Any deal could be worth as much as US$5bn, according to Bloomberg. Currently Americana is valued at around US$4.1bn by its listing on the Kuwait Stock Exchange.
No knowledge of offers
The report followed news in April that the Al Kharafi family had retained investment bank Rothschild to negotiate the sale of their 66.8% stake in Americana, according to Reuters. None of the parties commented on the report at the time.
Americana has also formally denied reports of a potential sale, saying in a stock exchange filing: “The administration of the company has no knowledge of this matter. The administration of the company has also not received any offers regarding it.”
Bloomberg suggested international private equity firms are increasingly interested in GCC acquisitions as a source of good growth, with regional firms able to take advantage of booming economies and growing Middle East populations.
Growing portfolio
Americana is one of the largest food providers in the region. It owns the regional franchises to restaurant brands such as KFC, Pizza Hut and TGI Friday’s, and operates 23 restaurant brands in total. It also sells frozen foods through its own Americana brand across the Middle East, along with other brands such as California Garden and Farm Frites.
Earlier this year Brazil’s second-largest food producer BRF announced it was in talks with Americana for a possible US$1bn joint venture. The plan would see BRF increase its Middle East production, in partnership with Americana – to date no further details have emerged.
Last year Americana announced total sales of US$3.1bn, up 7% on the year before, and a net profit of US$179m, up 10%.
In its 2013 annual report Americana said: “Since the end of 2009, the company opened 305 new restaurants and four new restaurant chains, and entered 21 new cities. The expansion and diversification plans also involved the manufacturing and trading, agricultural and poultry activities by providing new products, adding new production lines which provided access to new customers in the local and export markets.”