Creates Leading Global Poultry and Prepared Foods
Company
Pilgrim’s Pride Corporation (Nasdaq:PPC) (“Pilgrim’s” or the
“Company”) today announced that it has acquired Moy Park, a leading
poultry and prepared foods supplier with operations in the United
Kingdom and Continental Europe, from JBS S.A., in a transaction
valuing the equity interest of Moy Park at approximately $1.0
billion (or approximately £790 million based on a 1.31 exchange
rate as of September 8, 2017), implying an enterprise value of
approximately $1.3 billion (or approximately £1.0 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.
“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.
We will have new business opportunities through the addition of Moy
Park’s fully integrated poultry production platform and its strong
presence in prepared foods. Moy Park strengthens Pilgrim’s’ leading
portfolio of brands and brings strong value-added innovation
capabilities, access to new markets, a best-in-class production
platform and strong farmer partner relationships. In addition, Moy
Park shares Pilgrim’s long-standing commitment to become the best
and most respected company in our industry.”
Mr. Lovette continued, “We welcome the talented Moy Park team
members and management team, led by Janet McCollum, to Pilgrim’s,
and we look forward to working closely with them and their family
farm partners to drive growth and deliver value for our
shareholders.”
Janet McCollum, Chief Executive of Moy Park, said, “This
announcement is a positive development for Moy Park and all our
colleagues employed across the business. Pilgrim’s is one of the
leading chicken producers in the world with a proven track record
and we see great opportunities for Moy Park as part of this
successful business. Joining Pilgrim’s gives us the opportunity to
accelerate our growth plans, share best practices and leverage
Pilgrim’s expertise and operational excellence. Moy Park will
provide Pilgrim’s with a platform for growth in Europe as well as
access to innovation and increased exposure to prepared foods. Both
Moy Park and Pilgrim’s have a long heritage in agriculture and
poultry production going back over 70 years and we share the same
values. We look forward to this new and exciting phase of Moy
Park’s development as we continue to meet and exceed the needs of
our customers and consumers, providing fresh, locally-sourced
poultry and top quality, innovative products.”
Since its founding in Northern Ireland in 1943, Moy Park has
established a strong reputation for providing fresh, high-quality
and locally farmed poultry products, as well as a track record of
delivering top quartile profit growth. As a top 10 UK food company
and one of Europe’s leading poultry producers, Moy Park brings to
Pilgrim’s a fully integrated, market-leading platform with more
than 800 farmers across the UK. 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 Continental Europe.
Pilgrim's anticipates incremental annual revenue of approximately
$2.0 billion as a result of the transaction.
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 expects
the combination to be immediately accretive to earnings per
share.
Company Approvals
The transaction was negotiated and unanimously approved by a
Special Committee of the Pilgrim’s Board of Directors, which is
comprised of three independent equity directors, David E. Bell,
Michael L. Cooper and Charles Macaluso. The Special Committee was
advised independently and had been granted full authority over all
aspects of the transaction by the Board of Directors.
Mr. Cooper, Chairman of the Special Committee, said, “The
independent directors on the Special Committee conducted a
comprehensive review of the transaction, including the valuation
and the potential strategic benefits of this acquisition. Based on
this review, which included receipt of a fairness opinion from our
independent financial advisor, we unanimously believe that the
acquisition of Moy Park on the terms we negotiated is in the best
interest of Pilgrim’s and its shareholders.”
Management and Headquarters
Pilgrim’s believes in the importance of its local business model
and is committed to its team members across its global operations.
Moy Park will remain headquartered in Craigavon, Northern Ireland.
The Moy Park management team, led by Janet McCollum, will continue
to lead the business, and the rest of the Moy Park employee base
will remain in place. Moy Park will operate as a business unit
within Pilgrim’s and will maintain its day-to-day operations and
strategic focus.
Financing
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. Pilgrim’s believes that its strong cash flow
generation and the additional cash flow resulting from the
acquisition will allow the company to maintain its strong credit
profile while providing ample free cash flow for delevering and
facilitating further strategic acquisitions.
Advisors
Barclays is acting as financial advisor to Pilgrim’s. Evercore
is acting as financial advisor to the Special Committee of the
Pilgrim’s Board of Directors and Paul, Weiss, Rifkind, Wharton
& Garrison LLP is acting as legal advisor.
Conference Call Information
Pilgrim’s will host a conference call and webcast today,
September 11, 2017, at 6:00 a.m. MT (8:00 a.m. ET) to discuss the
transaction.
To access the conference call, please dial (866) 610-1072 from
the U.S. or (973) 935-2840 from outside the U.S. and provide the
conference code, 78909815. Supporting materials, as well as a link
to an audio webcast of the conference call, will be available in
the investor section of Pilgrim’s website at www.pilgrims.com under
“Events.” Please note that to submit a question to management
during the call, you must be logged in via telephone. Replays
of the conference call can be accessed by dialing (800) 585-8367
from the U.S. or (404) 537-3406 from outside the U.S. The
replay confirmation code is 78909815. A replay will be available on
Pilgrim's website approximately two hours after the call concludes
and can be accessed through the “Investor” section of
www.pilgrims.com.
About Pilgrim's Pride Corporation
Pilgrim's employs approximately 42,000 people and operates
chicken processing plants and prepared-foods facilities in 14
states in America, Puerto Rico and Mexico. The Company's primary
distribution is through retailers and foodservice distributors and
offers a portfolio of well-known brands including Gold Kist, County
Post, Pierce Chicken, Pilgrim’s Pride and GNP. For more
information, please visit www.pilgrims.com.
About Moy Park
Moy Park is one of the UK's top 10 food companies, Northern
Ireland's largest private sector business and one of Europe's
leading poultry producers. With 13 processing and manufacturing
units in Northern Ireland, UK, France, the Netherlands and Ireland,
the company processes 5.7 million birds per week, in addition to
producing around 200,000 tons of prepared foods per year. Its
product portfolio comprises fresh and added-value poultry,
ready-to-eat meals, breaded and multi-protein frozen foods,
vegetarian foods and desserts, supplied to major food retailers and
restaurant chains in the United Kingdom and Continental Europe.
Forward-Looking StatementsStatements contained
in this press release that state the intentions, plans, hopes,
beliefs, anticipations, expectations or predictions of the future
of the Company and its management are considered forward-looking
statements. Such statements are made in reliance on the safe harbor
provisions of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. It is important to note
that actual results could differ materially from those projected in
such forward-looking statements. Factors that could cause actual
results to differ materially from those projected in such
forward-looking statements include, but are not limited to: the
Company’s ability to manage and integrate the acquired business
(including realizing expected benefits of the transaction); the
risk of potential disruption to relationships with employees,
suppliers and customers of the acquired business; the risk that
stockholder litigation in connection with the transactions may
result in significant costs of defense, indemnification and
liability; matters affecting the poultry industry generally; the
ability to execute the Company's business plan to achieve desired
cost savings and profitability; future pricing for feed ingredients
and the Company's products; outbreaks of avian influenza or other
diseases, either in the Company’s flocks or elsewhere, affecting
its ability to conduct its operations and/or demand for its poultry
products; contamination of the Company’s products, which has
previously and can in the future lead to product liability claims
and product recalls; exposure to risks related to product
liability, product recalls, property damage and injuries to
persons, for which insurance coverage is expensive, limited and
potentially inadequate; management of cash resources; restrictions
imposed by, and as a result of, the Company’s leverage; changes in
laws or regulations affecting the Company’s operations or the
application thereof; new immigration legislation or increased
enforcement efforts in connection with existing immigration
legislation that cause the costs of doing business to increase,
cause the Company to change the way in which it does business, or
otherwise disrupt its operations; competitive factors and pricing
pressures or the loss of one or more of the Company’s largest
customers; currency exchange rate fluctuations, trade barriers,
exchange controls, expropriation and other risks associated with
foreign operations; disruptions in international markets and
distribution channel, including anti-dumping proceedings and
countervailing duty proceedings; and the impact of uncertainties of
litigation as well as other risks described under "Risk Factors" in
the Company's Annual Report on Form 10-K for the fiscal year ended
December 25, 2016 (as filed with the Securities and Exchange
Commission on February 9, 2017, and as amended on March 3, 2017)
and subsequent filings with the Securities and Exchange Commission.
The Company undertakes no obligation to update or revise publicly
any forward-looking statements, whether as a result of new
information, future events or otherwise.
CONTACT:
Pilgrim’s Pride
Investors:Contact: Dunham WinotoDirector,
Investor Relations Pilgrim's Pride Corporation
IRPPC@pilgrims.com(970) 506-8192 www.pilgrims.com
Media:Meaghan Repko / Alyssa Cass / Michael
Landau Joele Frank, Wilkinson Brimmer Katcher212-355-4449
Moy Park
Media:Jacinta Parkhill / Clare DalyMorrow
Communications+44 (0) 28 9039 3837
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