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Bankers shop for Patties Foods buyer – report

Paul Hitchcock, CEO of Patties Foods, with some of the products from Fitness Outcomes.

Frozen food manufacturer Patties Foods may be sold, with prospective foreign investors in discussions with banks working on behalf of the company’s majority owner Pacific Equity Partners. 

According to the AFR, PEP is considering options for the future of food company with “early-stage talks” having been held with “a bunch of offshore parties” who are considering adding Patties Foods to their existing portfolios or using the business as a platform to acquire more Australian brands. 

PEP acquired Patties Foods five years ago when the company was listed, the deal putting its value at around $232 million. Since then it has been restructuring the business and expanding its range, most notably adding an extensive vegetarian and plant-based alt-meat offer. In March, it bought ready-to-eat meals business Fitness Outcomes, which it said at the time boosted group turnover to almost $500 million. 

That deal resulted in the manufacturing of 20 chilled and frozen SKUs transferring to Patties Foods’ Packenham and Australian Wholefood sites. 

Patties Foods’ core brand is Four ‘N Twenty pies, and it also owns the Herbert Adams, Nanna’s and Chef’s Pride brands, along with the prepared meals brand Ruffie Rustic Foods, which it relaunched in June entirely meat-free.

With a turnover of circa $500 million a year and an operating margin of around 10 per cent, analysts told the AFR the company would be worth around $500 million representing a healthy return on investment for PEP, which holds about 75 per cent of the business. 

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