PE investment in Europe’s beverage sector has been resilient, with both value and volume on course to match or even surpass that of 2022.
This year, there have been 22 PE deals worth a combined €1.5 billion (about $1.64 billion), according to PitchBook data, while last year’s €1.6 billion was invested in the beverage sector across 32 deals.
CVC Capital Partners has been particularly active in the European beverage market. CVC-owned Stock Spirits has been on the acquisition trail recently, with the Polish company buying German sector peer Borco—owner of Sierra Tequila—last month. Stock Spirits is looking to use the acquisition to expand into the lucrative Western European market.
Alcoholic beverage producers have been a key feature of European PE deals this year with a number of breweries and distilleries being targeted. NM Capital completed a growth investment into London brandy producer Burnt Faith in April, as economic conditions have given rise to more minority deals in the sector due to issues financing large buyouts.
Consumer staples are considered necessities regardless of the broader economic context and are therefore attractive to PE firms. The largest deal in the past five years—which accounted for 2021’s stand-out total deal value—was CVC’s €4.5 billion carveout of Unilever‘s tea business Ekaterra, which owns Lipton and PG Tips. While the deal closed in July 2022, at a time when public debt markets were essentially closed, the bank loans used to finance the large acquisition have only started being sold on the secondary market this year.
There have also been a number of recent deals for tea and coffee producers. In June a number of local investors including Crédit Agricole Régions Investissement and IDIA Capital Investissement invested in French tea maker Dammann Frères, aiming to boost the brand’s international presence.
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