South Korean food giant CJ CheilJedang Corp. said Thursday that U.S. private equity fund Bain Capital has invested $320 million to acquire a 27 percent stake in its wholly-owned U.S. subsidiary CJ Foods America Corp., which holds a 70 percent stake in U.S. frozen food firm Schwan’s Co.
With the latest deal, Bain Capital would obtain a 19 percent stake in Schwan’s and CJ 51 percent.
Market observers say the backing from one of the world’s largest global investment firms is likely to add weight to CJ’s efforts to become a global food name. The latest investment was reportedly made under more relaxed terms than comparable deals, reflecting CJ’s high growth potential.
The Boston-based private equity fund has over $105 billion in assets under management and has made more than 1,000 investments since its inception in 1984. Its extensive capital market experience and deep expertise in the consumer goods industry are likely to be valuable assets, according to CJ. The investment does not affect CJ’s management of Schwan’s, the company added.
In November 2018, CJ bought Schwan’s for $1.84 billion in its biggest acquisition ever, taking up 70 percent of the U.S. food mogul with the remaining 30 percent held by existing shareholders. The deal gave CJ access to Schwan’s vast distribution network, including 17 production facilities and 10 logistics centers across the United States. The Minnesota-based food distributor, owner of brands such as Mrs. Smith’s pies and Tony’s pizza, is one of the top two players in the U.S. food market along with Nestle.
By Kim Gi-jung and Kim Hyo-jin
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]