Carlyle snaps up FMCG agency Acosta – but was the deal worth it?

Acosta Sales & Marketing, the US agency that works on in-store executions with US FMCG giants, has been snapped up by Carlyle. But was the multiple the private-equity firm is said to have paid too pricey?

Carlyle announced on Monday (28 July) it had acquired Acosta from fellow private-equity firm Thomas H. Lee Partners.

Financial details were not disclosed but Bloomberg reported Carlyle agreed to pay US$4.75bn for the business, including debt. The newswire claimed the price meant Carlyle paid nearly 13 times Acosta’s annual EBITDA, a relatively rich multiple.

“Acosta is well positioned to meet the changing needs of consumer product manufacturers and retailers seeking more effective and efficient outsourced sales and marketing solutions,” Sandra Horbach, MD and head of Carlyle’s consumer and retail team, said.

The slow-growth nature of the US grocery industry, and fierce competition, particularly in the centre of the store, has left some categories with fewer brands for agents to tout for business, some industry watchers have argued.

However, Jonathan Feeney, principal at research firm Athlos Research, believes Acosta could be worth the price Carlyle is said to have paid.

“It’s still a tough business but I’d say there are two aspects of Acosta that may make it worth more than is immediately apparent: the access to competitive data which can give Carlyle an advantage in sourcing deals and the movement in the US food industry away from direct store door delivery given weak volumes – manufacturers want more variable costs and potentially, more flexible approaches to market,” Feeney says.

“I’d add that it’s a consolidating food brokerage industry which should improve pricing power – potentially expanding margin and making that 13x look ok.”

Acosta, which has clients including Clorox and Kraft Foods Group, has its sights on further growth under Carlyle’s ownership.

“We are excited to lead Acosta into a new chapter with a focus on expanding services to meet a broader set of client and retailer needs,” Robert Hill, president and CEO of Acosta, said.

My Favorite Summer Cookbooks

The Lemonade Cookbook Bread Cake Doughnut Pudding Jeni's Splendid Ice Cream Desserts
A Change of Appetite The Bar Book Ceviche
Plenty More The Grilling Book The Nourished Kitchen
A Mouthful of Stars Let's Do Brunch Sweet and Vicious

I collect two things, nail polish and cookbooks.  Ironically, I don’t always have my nails done and I certainly don’t cook every recipe from this massive collection.  I have more cookbooks that any reasonable home cook should have.  They’re wonderful inspiration.  I love experiencing food through different perspectives. These are the most lovely of the summer books that I’ve collected so far.  Judging by this list, I have a lot of recipes to get in the kitchen and bake!  I’m starting with doughnuts and french toast.  Yes!

•  I love the California stylings of The Lemonade Cookbook.  It’s perfect for summertime.  Filled with lovely salads like this Watermelon and Snap Pea number, and a mega amount of lemonade inspiration.  Well, wouldn’t you expect that from The Lemonade Cookbook?  I made this Blueberry Mint Lemonade and swooned for days.

•  I like to think that I have a fool-proof and super-supreme doughnut dough base, but I’d really love to experiment with different doughnut recipes.  I mean… someone’s got to try all of the doughnuts, might as well be me.  Bread, Cake, Doughnut, Pudding is a gorgeous book and the doughnut recipe is on deck in my kitchen.

•  The new cookbook from Jeni’s is absolutely beautiful!  She has a way of combining wonderfully unusual ingredients into decadent and comforting desserts.  I’ve got my eye on the Extra-Strength Root Beer Ice Cream.  Jeni’s Splendid Ice Cream Desserts!

•  I love the way Diana Henry writes about food.  Elegant and inviting.  This piece make me want to sit down at a table and share a plate of radishes.  Radishes!  A Change of Appetite is her latest and most vegetable-centered book.  It’s thoughtful and rooted in the seasons.  Blackberry and Apple Rye Galette?  Done.

•  The Bar Book is all about technique!  A good cocktail comes from good technique.  This book is all about juicing, measuring, shaking, stirring, and garnishing with some awesome classic cocktail recipes.

•  I’ll be honest, I bought the Ceviche: Peruvian Kitchen cookbook because I loved the font and lived on a diet of banana y leche smoothies and ceviche while in Costa Rica this year.  This is a lovely book with lots of texture and place.

•  Do you have the Plenty cookbook?  Beyond.  I’m looking forward to Plenty, More out this Fall!  Yotam Ottolenghi is a beast when it comes to perfect cookbooks.

•  I’m learning how to grill.  Coals, starters, temperatures, smoke, and char!  I’m learning.  There is so much nuance.  The Grilling Book is my grill bible this summer.  So far I’ve grilled a ton of chicken, I’m working on my steak, and hoping to nail a pizza sometime soon.  Along with grilling here in New Orleans I have lots of white wine and mosquito repellant.  It’s perfect.

•  The Nourished Kitchen is such a mindful way to approach food and cooking.  It’s inspiring for any season.  There’s a tutorial on how to make raw milk yogurt, real buttermilk, and a recipe for Sourdough Blueberry Pancakes that look just dreamy!

•  This book of food and travel feeds my wanderlust like no other.  A Mouthful of Stars.  I now want to go to Seoul with Kim Sunee and eat everything ever.

•  Let’s Do Brunch!  No seriously, let’s!  This book is loaded with all sorts of breakfast-y / lunch-y inspirations.  It’s a sweet and simple book with a recipe for Almond-Crusted French Toast that I suddenly can’t live without.

•  I think I need to ask Libbie Summers to be my best friend.  The cover for her book Sweet and Vicious is a sign.  Any woman with a frosting-laden knife and cute dress is a soul sister.  The book is beautifully photographed and full of deliciously irreverent recipes.  Coconut Fluff Cake please and thank you.