Striking a match: Patties Foods
Patties Foods, the company behind some of Australia’s best-known food brands including Four’N Twenty, Nanna’s and Herbert Adams, is well placed to talk about the pros and cons of public versus private ownership.
From humble beginnings as a cake shop in regional Victoria in the 1960s, the family business grew to become a major player in the food sector nationally, and in 2006 was listed on the Australian Stock Exchange.
But ‘going public’ was not without its challenges, as Richard Rijs, director of Patties Foods and son of the company’s founders Annie and Peter Rijs, explains.
“One of the problems with being a public company is just that: being public. We were under much greater scrutiny and continually subject to the pressure of the next reporting season. It really impacted our ability to make practical, long-term decisions.
So in 2016, the family shareholders accepted an offer to partner with a leading Australian private equity firm.
“When we saw that the business was going backwards, we realised the only way we could capitalise on what we had was by becoming private again.”
It turned out to be the right decision for both the Rijs family and the company.
“Our partners are very happy to have family members involved in the business. They are happy to benefit from our industry experience, which is important to them and important to us.”
“In a short space of time, our private equity partners brought in experienced, intelligent and commercial directors, who then appointed an outstanding senior management team. These people have transformed the business.”
The private equity firm welcomed the ongoing advice and involvement of Richard and his brothers.
Another key advantage of ‘going private’ has been the enhanced ability to get deals done. In the 18 months since private equity came on board, Patties Foods has made two key acquisitions, bedded them down and immediately started to realise the synergies.
“That’s just the sort of action you get out of private companies,” says Richard.
Creating chemistry – how to form the perfect partnership
How can you form a sound relationship with a private equity investor for success like Patties Foods? View more tips like this by PwC's experts in our full infographic.
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Troy Porter
Partner, Private Capital Industry Leader, PwC Australia
Tel: +61 2 8266 7516