Pilgrim’s Pride gets deeper European foothold with Moy Park acquisition
12 Sep 2017 --- Brazilian-owned, American food company, Pilgrim’s Pride plans to buy Northern Ireland-based poultry producer Moy Park in a deal valued at about US$1.3bn. A special committee of Pilgrim’s Board of Directors has unanimously approved the acquisition which would see the company, which is majority-owned by JBS SA, firm up its position in Europe and diversify its portfolio.
Colorado-headquartered Pilgrim’s also believes Moy Park could generate incremental annual revenue of US$2 billion. The transaction is expected to be immediately accretive to Pilgrim's EPS.
Founded in 1943, Moy Park is the largest employer in Northern Ireland and counts global heavyweights like McDonald’s, Burger King and Pizza Hut among its foodservice customers, as well as supplying supermarket chain Asda.
It 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.
It 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.
“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 CEO.
“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.”
Team management
“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,” Lovette continues.
“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,” says Janet McCollum, Chief Executive of Moy Park.
“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.”
Pilgrim's expects to achieve approximately US$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.
“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,” says Michael Cooper, Chairman of the Special Committee.
Management and headquarters
Moy Park will remain headquartered in Craigavon, Northern Ireland and the 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.
