Thomas H. Lee Partners has completed its sale of Michael Foods to GS Capital Partners in a deal which values the company at $1.7 billion and netted the firm a return multiple of 3x. Debt financing was provided by Bank of America, Goldman Sachs and Barclays Capital, and THL and Michael Foods were advised by BofA Merrill Lynch and Weil, Gotshal & Manges on the deal, while GS Capital was advised by Goldman Sachs and Fried, Frank, Harris, Shriver & Jacobson. Post-transaction, THL continues to hold a 20% stake in the producer and distributor of food products.
133 food companies have received PE investments in the last three and a half years, according to the PitchBook Platform. Of the 144 PE deals, 20 were secondary transactions in which the company was sold by a PE investor to another PE investor. Overall deal flow seems to be back on the rise in 2010 after declining in recent years. There were 56 completed or announced deals in 2007, 42 in 2008 and only 26 in 2009, but with 20 deals already this year, 2010's deal count is poised to exceed last year's. 96 PE investors have invested in the industry over the same period with the most active including Brynwood Partners (5 deals), Creo Capital Partners (4), VMG Partners (4) and The Blackstone Group (3).