Private-equity firm Apollo Global Management LLC and investor C. Dean Metropoulos have formed a group of investors to explore a purchase of Sara Lee Corp., people familiar with the matter said.
Apollo and Metropoulos, a Connecticut entrepreneur who acquired Pabst Brewing Co. last year, are leading a consortium that includes Bain Capital LLC and TPG Capital LP, the people said.
The group has met in recent weeks with Sara Lee’s advisers to discuss a possible deal, the people added. Apollo and, separately, Kohlberg Kravis Roberts & Co., had approached Sara Lee last year about a buyout, but the company had decided against a sale, the people said.
Mr. Metropoulos is a veteran of the consumer-products industry and was chief executive of Pinnacle Foods Group LLC, the maker of Duncan Hines cake mixes and Mrs. Butterworth’s syrups, which was sold to Blackstone Group LP in 2007 for $1.3 billion.
Sara Lee recently rejected a takeover offer from Brazilian beef processor JBS SA and is waiting to see if JBS will return with a higher proposal, people familiar with the matter said.
Although Sara Lee is open to approaches, it is moving ahead with plans to split off its meats and coffee businesses into two separate companies, people familiar with the matter said.
Representatives for Apollo, Bain, TPG and Mr. Metropoulos declined to comment.
Sara Lee’s board plans to meet later this month to evaluate its future.
If the company splits up its main businesses, each could be sold separately, making it easier for buyers to finance a deal, the people familiar with the matter said.
JBS and private-equity firms might be interested in parts of Sara Lee, the people familiar with the matter said. JBS, which has a market capitalization similar to Sara Lee’s roughly $11 billion, could have trouble securing financing for a purchase of the entire company.
A $10 billion leveraged buyout by private-equity firms, meanwhile, has proved elusive since the financial crisis. But the debt markets have recovered and private-equity industry observers say that a $10 billion deal is possible this year.
Sara Lee’s coffee business, which has growing brands in Europe and Brazil, is among its most attractive assets, with $3 billion in revenue and an operating margin of 18 percent for the fiscal year ended in June. The meats business meanwhile had $346 million in income from continuing operations on $2.82 billion in sales.
– By Gina Chon and Anupreeta Das. Ilan Brat contributed to this article.
