Carlyle Group, which has already led two of the year’s biggest buyouts, is nearing a deal for supermarket specialist Acosta Sales and Marketing for as much as $5 billion, The Post has learned.
The firm, led by David Rubenstein, is paying between $4 billion and $5 billion after losing an auction to purchase one of Acosta’s biggest rivals, Advantage Sales and Marketing, earlier this year. Acosta is owned by the buyout shop THL Partners.
While Acosta isn’t a household name, shoppers see its work every day on grocery shelves. The Jacksonville, Fla.-based company is one of only three firms that help packaged goods behemoths like Procter & Gamble and Nestlé jockey for shelf space. Acosta handles in-store displays, manages inventory and promotes new product launches.
A wave of consolidation has reduced both the number of US retailers and in-store marketing specialists over the last several years, making it harder for brands other than the top two or three in any given product category to survive. Acosta’s profit margins and those of its rivals have gotten squeezed as a result.
“You’ve seen categories with a whole litany of competitors down to three,” Ronald Pedersen, former chairman of now-defunct Marketing Specialists Corp., told The Post
Pedersen predicts Carlyle’s strategy will be to grow the business internationally by serving some of the same clients overseas. He said there are six companies like Acosta in Europe that boast higher margins.
Carlyle will need to expand Acosta, which employs 23,000 workers, to manage its sizable debt load. The firm is paying 11 times Acosta’s earnings before interest, taxes, depreciation and amortization, a source said. Carlyle declined to comment.
Carlyle has been on a buying spree, with the $4.2 billion acquisition of Ortho-Clinical Diagnostics and a $3.2 billion deal for ITW’s packaging unit.