Pilgrim's Pride is acquiring Moy Park from JBS for $1.3 billion
The transaction was unanimously approved by a Special Committee of the Pilgrim's Board of Directors. Comprised entirely of independent equity directors elected to the Board by a vote controlled by the shareholders unaffiliated with JBS S.A., the Special Committee was delegated the full authority of the Pilgrim's Boards of Directors with respect to the transaction.
Furthermore, The transaction was funded by a combination of Pilgrim's cash on hand, existing credit facilities and a Subordinated Seller Financing Note issued by a wholly-owned subsidiary of Pilgrim's to JBS S.A., which the company intends to replace with the issuance of permanent financing.
The acquisition will give Pilgrim’s access to a fully integrated, market-leading platform with more than 800 farmers across the UK. Pilgrim's anticipates incremental annual revenue of approximately $2.0 billion as a result of the transaction.
Pilgrim's considers that it will maintain its strong credit profile thanks to its strong cash generation and the additional cash flow resulting from the acquisition. In addition, the company will be able to continue to make strategic acquisitions.
"We are pleased to announce the acquisition of Moy Park, which will position Pilgrim's to become a global player, with an improved and more stable margin profile on the chicken business and an expanded portfolio of prepared foods," said Bill Lovette, Pilgrim's Chief Executive Officer.
"Following our successful acquisitions of GNP and the assets in Mexico, Moy Park represents a logical next step in the evolution of our geographical and brands footprint. The acquisition gives us access to the attractive UK and European markets, which advances our strategy of diversifying our portfolio to be more global while reducing volatility across our businesses," Bill Lovette added.
Moy Park is a top 10 UK food company and one of Europe’s leading poultry producers. The company processes more than 5.7 million birds weekly and holds 13 processing plants located in the UK, Ireland, France and the Netherlands, which supply major food retailers and restaurant chains in the UK and Continental Europe.
Over the next two years, Pilgrim’s plans to achieve nearly 50 million dollars in annualized synergies, “primarily from the optimization of sourcing and production, and cost savings in purchasing, production, logistics, and SG&A”. The company expects the combination to be immediately accretive to earnings per share.
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