Dive Brief:
- Goldman Sachs' private equity arm is preparing to sell off Michael Foods, an egg, potato and dairy producer it bought in 2010 for about $1.7 billion.
- The investment bank is seeking $2 billion plus for Michael Foods, which owns retail brands such as Simply Potatoes, and supplies numerous products to foodservice operators. The company recently announced plans to expand production.
- New federal regulations of investment bank's private equity holding appear to be driving the move to sell.
Dive Insight:
The most-interesting piece of this story is that the sale follows Goldman Sachs' decision to restructure its private equity investments because of the so-called Volker rule. We have neither an army of accountants nor a legion of lawyers, so we make no pretense of understanding the new federal regulations determining how an investment bank can, or cannot, take advantage of the tax-shelter obscenities of private equity. But Goldman has such an army and such a legion. And Goldman has apparently decided to exit one of the more simple structures in its private-equity business and replace it with something complex and opaque. If we were more cynical, we'd think that the giant vampire squid seemed to be getting around the Volker rule. But that would be crazy.