Article
Four Private Equity Bidders Enter Second Round for Nestle’s Water Unit; Bank, PIK Financing in the Works to Back the Buyout
Private equity firms CD&R, KKR, PAI and Platinum have been admitted to the second round of bidding for the sale of a 50% stake in Swiss multinational food and beverage company Nestle’s water unit, sources told Octus.
The bidders are awaiting the process letter with second-round bids expected in around eight to 10 weeks from now, sources said.
Deutsche Bank has lined up an indicative loan-only financing at 5.75x leverage, with an option to have additional PIK facility at a 1x leverage on top of the senior debt package, according to sources.
The senior debt is expected to be evenly-split between euros and dollars given the underlying business is international, as reported.
The water unit is marketed off an EBITDA of around €500 million, with an expected enterprise value at about €5 billion, as reported.
Deutsche Bank and Rothschild are the sell-side advisors on the auction process.
If the stake sale is completed, the structure will likely resemble that of PAI’s joint venture with Nestle for Froneri, which was formed in 2016 through the merger of PAI’s R&R Ice Cream with Nestle’s European ice cream business. PAI has completed a €3.6 billion equity transaction to reinvest into Froneri, which involved the creation of a new single asset continuation vehicle, led by Goldman Sachs Alternatives.
Nestle announced on its capital markets day in November 2024 that the water and premium beverages activities would become a global standalone business under the leadership of Muriel Lienau, head of Nestle Waters Europe, as of Jan. 1, 2025.
The division includes water and soft drink brands such as San Pellegrino, Perrier and Acqua Panna.
CD&R, KKR and PAI declined to comment. Nestle and Platinum did not respond to a request for comment.
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