Is an IPO in Future for French Frozen Food Chain Picard?

Rothschild & Co has been engaged to review strategic options, including the possible sale, of Fontainebleau, France-headquartered Picard Surgelés, according to a Reuters report. The frozen food retailer operates more than 950 stores in Europe.

Reuters quoted an unnamed source as saying: "There is nothing concrete at this stage. Everything is possible. An IPO (initial public offering) is not excluded."

Lion Capital owns 51% of Picard. The minority 49% stake was purchased from the private equity firm a few years ago by Zurich, Switzerland-based Aryzta, one of the world’s foremost suppliers of frozen baked goods. It reportedly paid EUR 444.6 million in the transaction, which came with an option to acquire 100% of the company in three to five years.

picard productsLion Capital, Aryzta or financial advisory firm Rothschild & Co made no comment on speculation that Picard may be for sale. However, earlier this year Aryzta Chairman Gary McGann confirmed that his company “has commenced a process with Lion Capital to evaluate investment alternatives for the Picard business.”

Ringing up approximately EUR 1.4 billion in sales per annum, the private label retail specialist employs 4,500 people and sells more than 1,100 types of frozen products ranging from fruits and vegetables to fish and seafood, starters and appetizers, entrees, pastries, pizza, cakes, pies, other baked goods, ice cream other desserts. For the past five consecutive years, French consumers have named Picard their favorite food brand in the “L’Enseigne préférée des Français” survey conducted by Editialis and OC&C Strategy Consultants.

Picard’s share of the frozen food market in France, where most of its shops are located, is approximately 20%. The company also operates stores in Italy, Sweden and Belgium, and sells products in Japan through a partnership with the Aeon Group.

Aryzta, an Irish-Swiss food group with roots dating back to 1897 when founded as the Irish Co-Operative Agricultural Agency Society, produces the Delice de France range of bread products and high-end artisan breads. The company, which also makes sweet baked goods, muffins, pizza, tarts and pies, became the largest bakery in the world after purchasing major baking operations in Germany and North America in 2014. It operates more than 60 baked goods plants and kitchens, including facilities in South America, Asia, Australia and New Zealand. Revenues in 2015 topped EUR 3.4 billion.