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January 16, 2013 7:33 pm
The search for chief executives to lead two of Europe’s big frozen foods companies has narrowed after Findus Group poached James Hill, chairman of Unilever’s €1.2bn turnover Italian business.
Findus and its bigger rival Iglo, manufacturer of Birds Eye fish fingers and also owned by private equity, had both been trawling for leaders at difficult times for their respective businesses.
Findus, which freezes products ranging across fish, vegetables, meals and bakery, has written off about £440m following its debt-for-equity swap last year.
Iglo’s chief executive Martin Glenn is stepping down following a failed attempt by owner Permira to sell the company last year.
Lion Capital, which owns Findus, was among the private equity buyers drawn to frozen food by its stable cash flow and reputation for being relatively recession-proof.
It acquired FoodVest, the maker of Findus frozen foods and Young’s seafood products, for £1.1bn from CapVest, a smaller buyout house in mid 2008.
Iglo paid €1.9bn to acquire Unilever businesses in 2006 and added the Italian operations, Findus Italy, in 2010. That was run by Mr Hill in the year pre-disposal, who also headed up Birds Eye Walls for Unilever, the consumer goods conglomerate for four years.
Mr Hill, a 32-year veteran of Unilever, will take up the reins at Findus on April 1. He replaces Chris Britton, who had held the top slot since June 2009 and quit at the end of December.
Although Lion Capital, which has suffered from a number of poor investments in its consumer-oriented portfolio, has held Findus since 2008, Mr Hill said he did not envisage presiding over a sale in the short to medium term.
“The company has just been recapitalised and they have done that because they think the company is undervalued and needs a few years of really good leadership and management to bring it to its full potential,” he said. “So we are not talking about exits but looking to improve the business.”
Findus racked up goodwill and brand impairment losses of £219m in 2011 – when it generated earnings before interest, tax, depreciation and amortisation of £90.4m, down from £117m in 2010. A similar amount is likely to have been erased in 2012. In 2011 it reported an operating loss of £241m, versus a £17m restated profit in 2010.
Strained finances, together with the tough economic climate for food and drink manufacturers in much of western Europe, has prompted speculation that Findus could yet become a takeover target.
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