By Gerelyn Terzo, Global AgInvesting Media
In a move that highlights the appeal of consumer staples in private equity portfolios, PAI Partners has finalized a €3.6 billion ($4.2 billion) equity transaction to deepen its stake in Froneri, a pure-play ice cream giant. This expanded partnership signals PAI’s long-term commitment to the dairy-focused food powerhouse while ushering in heavyweights like co-investor Abu Dhabi Investment Authority (ADIA) and Goldman Sachs Alternatives, the latter of which is spearheading a single-asset continuation vehicle, demonstrating how innovative financing structures are fueling growth in the ag-food investment landscape.
The transaction restructures PAI’s roughly 50 percent ownership in Froneri, introducing a substantial minority co-investment from an ADIA subsidiary and a pioneering single-asset continuation vehicle spearheaded by Vintage Strategies at Goldman Sachs Alternatives. According to sources cited by Bloomberg, “ADIA and PAI are jointly investing €1.4 billion directly in the business.” Demand is robust, as evidenced by the continuation fund’s oversubscribed status, attracting a mix of existing and new institutional backers while blending liquidity options with a capital infusion, paving the way for PAI to keep the asset in its portfolio, as noted by the Bloomberg report.
Coming on the heels of Froneri’s debt refinancing earlier this year, this capital infusion strengthens the company’s balance sheet, positioning it for organic growth and market consolidation, per the announcement.
Launched nearly a decade ago from a joint venture between PAI’s R&R Ice Cream and Nestlé’s European ice cream division, Froneri has evolved from a regional private-label player into a revenue-generating behemoth operating across roughly two-dozen countries. On the heels of that launch, Nestlé divested its U.S. ice cream business to Froneri in a $4 billion deal. Today, Froneri boasts a roster of iconic brands like Häagen-Dazs, food innovation and a robust supply chain anchored in dairy and ag-sourced ingredients, key to its influence in fast-growing segments like indulgent treats and health-focused novelties.
PAI Partners Co-Managing Partner Frédéric Stévenin stated, “Froneri is a clear example of PAI’s ability to create and grow global champions in the consumer sector. Since we first partnered with Nestlé in 2016, the business has successfully expanded into new markets, strengthened its branded portfolio and established itself as a global leader. This success is also a testament to the strength and commitment of Froneri’s management team. We are proud to continue our journey with Froneri and Nestlé, and to welcome ADIA and other leading global institutions as shareholders for Froneri’s next phase of growth.”
Froneri CEO Phil Griffin commented, “Froneri has grown into one of the world’s leading ice cream companies since its formation in 2016. The renewed commitment of our partners, combined with the addition of new investors and capital, reflects confidence in our business and reinforces the strong partnership that underpins our growth. We look forward to building on this momentum in the years ahead.”
Goldman Sachs Alternatives Managing Director Gabriel Mollerberg said, “We are excited to continue the journey with Froneri and partnership with PAI as the lead investor in the new continuation vehicle. Froneri’s market positioning, attractive financial characteristics, exceptional operational execution and strong alignment with all key shareholders made it a strong continuation vehicle candidate. We look forward to this next chapter alongside PAI and management.”
Private equity firms view agriculture as a stable, inflation-resistant asset class, with investments accelerating amid a projected 60 percent increase in global food demand by 2050 and growing ESG opportunities, such as sustainable technologies.
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