Record Russian LBO as Lion Capital Buys Drinks Maker
The biggest-ever leveraged buyout in the sluggish Russian buyout market has just been anounced, with Lion Capital buying the juice drinks company Nidan Soki for over USD 500 million. UK-based Lion Capital has been steadily expanding its portfolio of branded food companies.
The fund bought out the UK cereal maker Weetabix for GBP 640 million in November 2003, picked up Orangina (together with Blackstone), the former European beverages division of Cadbury Schweppes, in February, 2006 and in August of that year bought Kettle Foods, the market leader in both the US and the UK for organic potato chips. Lion and Blackstone were also named as potential candidates for buying out Cadbury Schweppes' US drinks division, the sale of which is now on hold following the collapse of the market for buyout debt in the US.
While other private equity funds have tread warily in the Russian environment, Lion's purchase seeks to capitalize on a rapidly growing market for non-alcoholic beverages, reflected in Nidan Soki's substantial 2006 increase in sales and 100% increase in net profits. The company employs 2,500 staff.