• Marketed off EUR 18m in 2024 EBITDA, collected first-round bids last week
• Declining sales and Italian birth rates might concern potential buyers
• Newlat might show interest, leveraging its infant formula business expertise

The Kraft Heinz Company [NASDAQ:KHC] is considering a sale of Plasmon, an Italian infant-food brand it owns, through Houlihan Lokey, three sources familiar with the situation told this news service.

First-round bids were collected last week, the first two sources said.

The sale process for Plasmon, which generated EBITDA of EUR 18m for 2024, kicked off in October last year under the project code-name Albany, one source said. He noted that Plasmon’s sales have been going down and that it could be a major concern among interested parties.

Declining birth rates in Italy are adversely affecting the company’s growth prospects, given its heavy domestic focus, this source said. Italy had a birth rate of 1.2 children per woman in 2023, a record low, according to statistics bureau Istat, and this number continued to drop in 2024.

Kraft tried to sell the business previously, per media reports, but it did not receive the valuation it was seeking at the time, the third source said.

Plasmon was posting annual revenues of around EUR 200m with gross profit of EUR 50m with a valuation of EUR 700m, per a media report at the time.

The sale was expected to attract large private equity funds such as Advent, Investindustrial, Permira, Lion Capital and BC Partners, another report said.

There is a range of strategic investors that could be interested in the business, which includes Newlat, Granarolo and Deco Industrie, two of the sources said. Were it to throw its hat in the ring, Newlat could emerge as frontrunner as it has experience in the sector, one of the sources said.

Newlat is an Italian owner of brands across various food segments, including infant-formula business Children’s World.

Hero Group, a Swiss food company focused on branded nutritional food products, and FrieslandCampina, a Dutch dairy nutrition company, are both in the baby-food category and could be among the logical suitors, a sector advisor said.

Private equity firms have also been informed, one of the sources said, while another added that sponsors with investments in the sector could be interested. Another of the sources was more sceptical about the business coming under PE ownership, noting that private equity firms might be disinclined to invest due to Plasmon’s declining growth.

Plasmon owns iconic baby-food brand Nipiol.

Newlat, Houlihan Lokey and Kraft Heinz declined to comment. Plasmon did not respond to requests for comment.