Unilever’s Lawry’s in second round; Lehman advising

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Unilever’s sale of its Lawry’s seasoning salt business is in its second round, said sources familiar with the process. Lehman Brothers is advising the UK-based company on the divestiture, one source said.

Two sources said revenues for the business were USD 150m. Lawry’s is a good brand but too small for Unilever to manage, said one source. It has relatively flat growth, the source added. A second source said it could go for 2x to 3x revenues but a third banker was skeptical of that high of a multiple. A fourth banker said the company would not likely have any problems closing this deal based on credit concerns because of the cash available to the large strategics interested in Lawry’s.

McCormick, a listed spice and flavor company based in Maryland, was named by two sources as an interested bidder, though the first source mentioned potential antitrust concerns. McCormick has a market cap of USD 4.58bn. That source also said Pinnacle Foods, owned by Blackstone, was looking at the business. The second source said Associated British Foods, which owns US-based Tone’s, Spice Islands and Durkee, would also be interested. The company has a USD 6.47bn market cap. Lastly, the second source said Heinz would like the business, but he was unclear whether the Pennsylvania-based company would go for Lawry’s. Heinz’s market cap is USD 14.6bn.

Lawry’s was first flagged as a divestiture candidate by this news service in August.

Unilever declined to comment on activities not formally announced by the company. Current publicly disclosed divestiture candidates for the company include its US-based laundry business, a process being run by Morgan Stanley.

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