It is well documented that 2014 was a significant year for exits, with aggregate value reaching $432bn. While the marquee billion-dollar acquisitions were found in the healthcare sector, food & agriculture is an industry that should not be overlooked. Over the last several years, this sector has displayed impressive growth in both the number and aggregate value of exits. Preqin’s Buyout Deals Analyst shows that the total value of private equity-backed exits in the food & agriculture sector stood at $38.8bn in 2014, an increase of 87% on the previous year.
It is interesting to see that since 2010, the number of realizations in the food & agriculture industry, full or partial, has generally exceeded that of pre-crisis levels. The highest proportion of exits has occurred through trade sales, which typically accounted for 50-60% of exits in the period 2006 to 2014. This was followed by sales to GPs, public market offerings and restructurings.
Europe stands out for its bumper year; the region accounted for $12.5bn of the global aggregate exit value for food & agriculture exits in 2014, compared with $2.8bn the previous year. Regions outside North America and Europe, namely Asia, also displayed remarkable increases in aggregate exit value. However, North America recorded a $1.5bn decrease in aggregate exit value between 2013 and 2014. In spite of this, the region witnessed an 11% increase in the number of exits over this same period.
The largest food & agriculture exit of 2014 was the January trade sale of KKR’s Oriental Brewery, which was held for five years, to Belgium’s Anheuser-Busch InBev for $5.8bn. However, that was not the only significant transaction that KKR had a role in; the American private equity firm also held stakes in WILD Flavors GmbH and the canned food division of Del Monte Foods, which were purchased for €2.3bn and $1.675bn respectively. Other notable exits include the acquisition of Blackstone and PAI Partner’s United Biscuits by Yildiz Holding for £2.2bn and the initial public offering of WH Group Ltd, which successfully raised $2.05bn.