Pvt equity firms to buy Del Monte for $5 billion

The deal by KKR and two other firms, Vestar Capital Partners and the buyout arm of Centerview Partners, is also the latest in a streak of food-related mergers and acquisitions.

The takeover of Del Monte — whose product line is now dominated by pet foods like Kibbles ‘n Bits rather than fruits and vegetables — would also be among the largest consumer-goods buyouts in recent years.

Private equity firms have been on a tear this year, buoyed by billions of dollars in their war chests and the bond market boom that has supplied them with cheap debt to finance their deals. 

TPG Capital and Leonard Green & Partners announced a deal this week to take over J. Crew for about $3 billion. About $10 billion worth of leveraged buyouts were announced this week, the most in one week since the height of the private equity boom in the summer of 2007, according to data from Capital IQ.

Still, the steady stream of takeovers has topped out at about $5 billion, a far cry from the $10-billion-plus deals during the buyout boom earlier this decade.

While the junk bond markets have recovered from their lows during the financial crisis, private equity firms are still unable to raise the money needed to strike giant leveraged buyouts.