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Pacific buys Heinz unit

Sydney-based Pacific Equity Partners has overcome bird flu fears to acquire Heinz’s New Zealand poultry subsidiary Tegel Foods.

Sydney-based Pacific Equity Partners, which has shown a taste for food deals in the past, has acquired H.J. Heinz unit Tegel Foods, a New Zealand processor of poultry and animal feeds. No deal terms were disclosed.

Tegel Foods markets its own branded chicken and turkey products and operates processing plants, feed mills and livestock operations throughout New Zealand. Tegel was acquired by Heinz in 1993 as part of the ketchup maker’s acquisition of condiment maker Wattie’s.

The sale of Tegel has been expected for some time, although in November there were reports that bird flu fears had thrown the auction of the subsidiary into flux. The Australian reported that the two final bidders for the property, Pacific and Ironbridge Capital, both sought to trim their initial proposals amid fears that a possible bird flue pandemic could loom as a potential threat. UBS, which advised Heinz on the sale, reportedly had to go back to the earlier-round bidders to gauge their level of interest.

The newspaper indicated Heinz had originally anticipated a sale price of around A$350 million ($256 million; €215 million) for the company.

Pacific Equity has historically been an active player in the foods space. The firm has logged past investments in energy drinks maker Frucor Beverages and Collins Foods, an operator of Sizzler, KFC and Pat & Oscars restaurants. The KFC link could prove critical to this latest deal, as Tegel’s supply contract with the chicken restaurant was cancelled last year.

The investment comes as Pacific Equity is reportedly prepping a new, A$1 billion fund. According to those reports, the firm could hold a final close on the vehicle by February.