Kettle Foods for sale as M&A in CPG picks up

A new wave of deal making is occurring in the consumer aisle.

November was the biggest month in over a year for deals involving consumer-products and food and drinks firms, with $12.54 billion in acquisitions.

In recent weeks, a closely-held chip-maker, a juice-maker and hair- and skin-care company have been offered for sale, as a persistent decline in consumer-spending shakes up the companies whose products line supermarket and drugstore shelves.

The largest of the closely-held consumer-product companies to be put up for sale is Kettle Foods Inc., an Oregon-based maker of gourmet potato chips, tortilla chips and other snacks.

Kettle's owner, London-based private-equity firm Lion Capital LLP, recently hired boutique investment bank Rothschild to conduct an auction, said several people familiar with the matter.

Lion, which acquired Kettle in 2006, is seeking about 10 times its annual earnings—or around $700 million—those people said. Among those looking at Kettle are PepsiCo Inc.'s Frito-Lay unit, and pretzel maker Snyder's of Hanover Inc., said one of these people. A Frito-Lay bid faces antitrust concerns, said this person. A deal is likely to be completed early next year.

A Kettle spokeswoman declined to comment.