Warburg Pincus and Kelso to make US$5B bid on Femsa’s Envoy Solutions, say reports

24 Aug 2023 --- Multinational beverage and retail company Fomento Económico Mexicano (Femsa) is reportedly planning to sell Envoy Solutions, a US foodservice and packaging company, to private capital firms Warburg Pincus and Kelso & Co. for US$5 billion.

Envoy Solutions, based in Glenview, US, is a specialized distributor and solution provider serving the US market through distributors and specialty marketing solutions. Its focus is on facility care, foodservice, packaging and marketing execution. With the support of its parent company, Femsa, Envoy Solutions says it can create value for its customers, vendors, employees and communities. 

Mexico’s Coca-Cola bottler Femsa has over 30 subsidiaries that range from chemical and biological disposal to marketing solutions. 

José Antonio Fernandez Carbajal, Femsa’s CEO, reportedly said in the company’s Q2 report of this year that “Envoy Solutions showed sustained revenue growth driven by recent acquisitions, assisting in the gross profit and income from operations increase.” 

Strategic moves 
Femsa shares gained 3.5% in trading in Mexico City last week, making it the biggest intraday since May this year. 

In February 2023, the company announced its intentions of reviewing its strategy for non-core units. The report also states that “consistent with its Femsa Forward strategy as communicated on February 15, 2023, it has entered into a definitive agreement to divest its minority investment in Jetro Restaurant Depot and related entities.” 

In 2010, Fema acquired 20% of Heineken Group for approximately US$3.58 billion. It also acquired Switzerland-based Valora, which operates 2,700 cafés and convenience stores for US$1.2 billion last year to expand its European stronghold. 

Mexico Business News last week reported that the sales of the foreign subsidiaries could point toward Femsa’s intention to transition from offshoring to nearshoring. 

During the Eugenio Garza Sada Award ceremony, Carbajal is reported as saying that “Mexico today has a unique growth opportunity with the transition from offshoring to nearshoring. We have the infrastructure, highly qualified workforce and we benefit from almost 30 years of free commerce.”

Edited by Natalie Schwertheim