Goldman Sachs, alongside the state-backed Abu Dhabi Investment Authority, has made a significant investment in Froneri, the parent company of Haagen-Dazs. This agreement estimates the ice cream business to be valued at approximately 15 billion euros ($17.6 billion), debt included.
Froneri is a collaborative venture between European investment firm PAI Partners and Swiss food conglomerate Nestle.
PAI announced on Thursday that it has finalized a 3.6 billion euro deal aimed at restructuring ownership of its 50 percent stake in Froneri. This arrangement brings in a subsidiary of ADIA as a “significant minority co-investor,” along with a stake from a vehicle managed by Goldman Sachs Alternatives.
Further specifics about the new ownership structure were not disclosed.
According to two knowledgeable sources, Froneri’s valuation stands at around 15 billion euros, inclusive of debt.
The company includes iconic ice cream brands like Haagen-Dazs and Rowntree’s, positioning it as a competitor to Unilever’s upcoming spin-off ice cream division, the Magnum Ice Cream Company. PAI reported global revenues for Froneri at $5.5 billion.
Established in 2016 as a 50:50 joint venture between Nestle and PAI unit R&R Ice Cream, Froneri acquired Nestle’s US ice cream operations in a $4 billion transaction in 2019.
The investment spearheaded by Goldman Sachs was executed through a single-asset continuation vehicle.
Continuation vehicles are increasingly utilized by private equity firms to extend their ownership of assets beyond the duration of the original funds that acquired them.
PAI noted that there was an oversubscription in demand for the continuation vehicle, indicating strong investor interest in Froneri’s growth potential.
“We are excited to continue our journey with Froneri and Nestle, and to welcome ADIA and other prominent global institutions as shareholders during Froneri’s upcoming growth phase,” remarked Frederic Stevenin, co-managing partner at PAI.
Nestle expressed their approval of the new investment in Froneri and commended PAI Partners for their ongoing commitment. “Froneri is a thriving joint venture that continues to impress customers as a key player in the ice cream segment,” the company stated.
One insider mentioned that Nestle will maintain its 50 percent ownership stake in Froneri. Nestle has yet to respond to a request for further comments.
At 1200 GMT, Nestle shares saw a 0.4 percent increase.
Reports from Bloomberg and the Financial Times previously highlighted the potential deal and Goldman Sachs’ interest.
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