April 20, 2015 / 12:57 PM / 2 years ago

Nomad Holdings to buy UK frozen foods maker Iglo for $2.8 billion

3 Min Read

A Birds Eye frozen spaghetti bolognese meal is seen in a grocery store in London February 22, 2013.Neil Hall

(Reuters) - Nomad Holdings Ltd NHL.L said it would buy Iglo Foods Holdings Ltd, Europe's biggest frozen foods business and the company behind the Birds Eye brand, for about 2.6 billion euros ($2.8 billion) from a company backed by private equity group Permira.

The deal is expected to be funded through a combination of Nomad's cash on hand, equity, and the proceeds from a private placement to raise about $750 million, Nomad Holding, an acquisition company formed in April 2014, said on Monday.

UK-based Iglo sells its frozen food such as fish, vegetables and meat across 12 European countries, with a focus on the United Kingdom, Germany and Italy where it has manufacturing plants.

Nomad Holdings was founded by Noam Gottesman and Martin Franklin. Israeli-American Gottesman is founder of investment firm Toms Capital and co-founder of hedge fund GLG Partners, while Franklin is founder and executive chairman of Jarden Corp JAH.N, which has acquired many well-known consumer brands.

Calling Iglo its "anchor investment", Nomad said it would pursue more acquisitions to enhance its consumer offerings in existing as well as new categories.

Nomad Holdings said it plans to change its name to Nomad Foods Ltd, with Gottesman and Franklin as non-executive chairmen and Iglo's Chief Executive Elio Sceti a non-executive director.

Nomad Holdings said Sceti, who will remain Iglo's CEO until June, has resigned to take up the same position at U.S.-based perfume maker Coty Inc (COTY.N).

Nomad asked the London Stock Exchange to suspend trading in its stock till the deal closes. After that Nomad said it expects to pursue a listing on the New York Stock Exchange as well.

The deal is expected to close in the second quarter.

The Permira funds and senior management will re-invest a portion of their proceeds into 133.5 million euros ($143 million) of equity at closing and are expected to own about 9 percent of Nomad Foods, the company said.

The Financial Times reported news of the deal earlier. (on.ft.com/1Oy3ekI)

UBS and Barclays are Nomad's financial advisers and Greenberg Traurig is its legal adviser. Centerview Partners is Permira's financial adviser, while Skadden, Arps, Slate, Meagher & Flom LLP and Clifford Chance are its legal advisers.

($1 = 0.9314 euros)

Reporting by Aastha Agnihotri in Bengaluru; Editing by Ted Kerr and Savio D'Souza

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