Pilgrim's Pride buys Northern Ireland's Moy Park in a $1.3 billion deal

Pilgrim's Pride buys Northern Ireland's Moy Park in a $1.3 billion deal

The UK's largest poultry producer Moy Park, which employs more than 1,000 people at its Grantham site off Gonerby Road, has been bought by USA leading chicken producer Pilgrim's Pride Corporation, which is headquartered in Colorado.

No-moat Pilgrims Pride is building out its worldwide footprint with the $1.3 billion cash purchase of Moy Park, the second largest United Kingdom poultry producer, from its parent JBS (which owns almost 80% of Pilgrim's shares).

Moy Park CEO Janet McCollum will stay on to lead the business in its headquarters in Craigavon, Northern Ireland.

Moy Park is a poultry processor and prepared foods manufacturer based in Northern Ireland.

Pilgrim's expects to achieve approximately $50 million in annualized synergies over the next two years, primarily from the optimization of sourcing and production, and cost savings in purchasing, production, logistics and SG&A.

Pilgrim's Pride's leverage would rise from 1.1 times ebitda, as of the end of June, to 2 times as of the time of the deal's closing.

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Pilgrim's said the committee "was advised independently and had been granted full authority" over all aspects of the transaction, suggesting the scandal-plagued family controlling the Brazilian meatpacker did not intervene in the decision.

Meat producer JBS, which has a more than 78 percent stake in Pilgrim's Pride, is in the midst of selling assets after executives admitted to bribing politicians in Brazil. Seven Eight Capital LP bought a new stake in shares of Pilgrim's Pride Corporation during the 2nd quarter worth about $134,000.

The Batistas are aiming to list the division, JBS Foods International, in NY by the end of next year.

Moy Park processes more than 5.7 million birds per week and has 13 processing plants located in the UK, Ireland, France and the Netherlands, supplying major food retailers and restaurant chains in the UK and Europe.

JBS has agreed to sell Moy Park - which claims a 25% share of the western European chicken market - for an enterprise value of $1.3bn, with the equity interest valued at $1.0bn, and the balance comprising the likes of borrowings. According to the Brazilian company, the proceeds from the operation will be used to amortize short-term debt in Brazil, improving its debt profile and liquidity.

The Batistas are also facing a series of probes and a rift with minority shareholders of JBS, who are demanding the removal of Wesley Batista as chief executive officer.

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