* Business fetches more than 500 mln pounds - sources
* Sale could pave way for sale of rest of UB
* Sale of rest of UB unlikely before end 2013 -source
* KP Snacks has annual sales of 280 mln stg
By Simon Meads
LONDON, Dec 5 German group Intersnack is to buy
KP Snacks, Britain's second-largest savoury snacks maker, in a
deal that could pave the way for the sale of the rest of United
Biscuits by its private equity owners.
While no financial detail was disclosed, two people familiar
with the situation said on Wednesday the deal for the maker of
Hula Hoops and KP Nuts was worth more than 500 million pounds
Private equity firms Blackstone and PAI put United
Biscuits' savoury snacks arm up for sale earlier this year,
attracting rival private equity firms and food industry rivals.
The deal showed how private equity houses are breaking up
their largest companies, bought at the height of the buyout
boom, because they cannot find takers for the whole business.
Blackstone and PAI had tried two years ago to sell all of
United Biscuits, a business they bought in 2006 for 1.6 billion
The sale leaves them still in control of the larger biscuits
business, which makes McVitie's Hobnobs and Jacob's Cream
Crackers and has 30 percent of the British market.
The owners are hoping the sale will mean the biscuits arm,
which has 180 million pounds earnings before interest, tax,
depreciation and amortisation (EBITDA), will attract buyers not
interested in salted and savoury snacks, one of the people said.
International operators, incluukpding Chinese group Bright
Food and U.S. companies Campbell Soup and
Kellogg's, had shown interest in the whole group in 2010
when the private equity firms investigated a sale and could be
However, a sale of the biscuits business is unlikely to
launch before the end of 2013 at the earliest, the person said.
Other private equity houses are following a similar route
with some of their largest companies, hoping that splitting them
up will lead to more profitable exits.
KKR and Permira are carving up German
broadcaster ProSiebenSat.1 to make it more
attractive and digestible for potential buyers.
The price paid for KP Snacks equates to nine times its 2011
EBITDA of 56 million pounds. The business, which also sells the
McCoy's and Nik Naks brands, has annual sales of 280 million
pounds and employs about 1,500 people.
Privately-owned Intersnack, whose brands include Pom-Bear
potato snacks and Penn State pretzels has turnover of about 100
million euros ($131 million) in Britain, said the deal would
allow it to grow further and strengthen its position.
Intersnack, which has operations across Europe, is aiming
for sales of 1.7 billion euros in 2012.
The KP Snacks deal, which is expected to close in the first
quarter of 2013, will be financed with Intersnack's shareholder
equity and a syndicated loan underwritten by Commerzbank, HSBC
Trinkaus & Burkhardt, HSBC and UniCredit.