The acquisition of Patties Foods and Vesco Foods by investment firm PAG is set to benefit it long-term claims GlobalData.
The Australian-based savory snacks manufacturer Patties Foods and ready-made meals manufacturer were recently acquired by PAG, a Hong Kong-based affiliate of the Blackstone Group, for an estimated $472 million.
Parthasaradhi Reddy, Consumer Analyst at GlobalData, said the competition in the Australian savory snacks market is intense, with PepsiCo gaining a huge lead over other companies.
“The entrenched presence of global multinational companies will force PAG to spend significantly if it has to gain a share.
“PAG’s acquisition of Patties Foods and Vesco Foods might diversify its presence in the consumer food segment in Australia, but it remains to be seen if PAG has the wherewithal and the patience to sustain in a mature market with bleak growth prospects.”
The per capita consumption of savory snacks in Australia is expected to decline from 3.3kg in 2021 to 3.1kg in 2026. Moreover, the savory snacks market is expected to be relatively stagnant and record a very modest volume CAGR of 0.2 per cent during 2021-26.
“Apart from expanding PAG’s product portfolio and adding to the existing brands such as Red Rooster, Oporto, and Chicken Treat, and the Cheesecake Shop, the new acquisitions will allow the company to enter into a market with high per capita consumption of snacks.”
Sid Khotkar, Managing Director and Head of PAG Private Equity in Australia and New Zealand, said the transaction enhances the strength of its business in Australia and New Zealand.
“We are excited about this unique opportunity to take some of Australia and New Zealand’s best-loved brands to the next level. Over the past few years, PAG has had the privilege of working with several leading local companies, and we are looking forward to putting that expertise to work in support of Patties and Vesco and helping them provide the highest quality products to consumers across Australia, New Zealand and beyond.”
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