Featured Company News – Pilgrim’s Pride Acquires UK’s Top Food Company Moy Park

Research Desk Line-up: G. Willi-Food Post Earnings Coverage

LONDON, UK / ACCESSWIRE / September 13, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Pilgrim’s Pride Corp. (NASDAQ: PPC), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=PPC. The Company announced on September 11, 2017, the acquisition of Moy Park, one of the UK’s top 10 food companies from JBS S.A. The transaction values the equity interest of Moy Park at nearly $1.0 billion, equivalent to £790 million based on an exchange rate of 1.31 as on September 08, 2017. This implies an enterprise value of nearly $1.3 billion or around £1.0 billion. For immediate access to our complimentary reports, including today’s coverage, register for free now at:

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Discover more of our free reports coverage from other companies within the Food – Major Diversified industry. Pro-TD has currently selected G. Willi-Food International Ltd (NASDAQ: WILC) for due-diligence and potential coverage as the Company announced on August 30, 2017, its unaudited financial results for Q2 2017 which ended on June 30, 2017. Tune in to our site to register for a free membership, and be among the early birds that get our report on G. Willi-Food when we publish it.

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Acquisition to Enhance Pilgrim’s Pride Leadership Position

Bill Lovette, Chief Executive Officer at Pilgrim’s Pride, expressed his pleasure on announcing the acquisition of Moy Park, which shares Pilgrim’s Pride long-standing commitment to become the best and most respected Company in the poultry and prepared food industry. Moy Park was found in 1943 in Northern Ireland. Since then, it has established a strong reputation for providing fresh, high-quality and locally farmed poultry products, and a track record of delivering top quartile profit growth.

Lovette welcomed talented Moy Park’s team members and management team, led by Janet McCollum, to the Pilgrim’s Pride family. He shared that he is looking forward to working closely with Moy Park’s team and their family farm partners to drive growth and deliver value for the shareholders.

Acquisition to create a leading global poultry and prepared foods Company: The acquisition of Moy Park would lead to an improved and more stable margin profile for the chicken business and an expanded portfolio of prepared foods. This, in turn, would enable Pilgrim’s Pride to become a leading global player in the poultry industry.

Enhances Pilgrim’s Pride Geographic Diversity by Expanding Operations Across the UK and Continental Europe: Post its acquisition of GNP and the assets in Mexico, the deal with Moy Park is a logical next step for enhancing Pilgrim’s Pride geographical and brands footprint. This move would provide Pilgrim’s Pride access to the lucrative UK and European markets. This would help the Company diversify its portfolio and lessen volatility across its businesses.

New business opportunities: This deal will open up new business opportunities for Pilgrim through the addition of Moy Park’s fully integrated poultry production platform and its strong presence in prepared foods.

A Stronger Brand Portfolio: The addition of Moy Park would bolster Pilgrim’s Pride’s leading portfolio of brands and bring in strong value-added innovation capabilities, access to new markets, a best-in-class production platform and strong farmer partner relationships.

Synergies of around $50 million: Pilgrim’s Pride anticipates achieving nearly $50 million in annualized synergies over the next two years, mainly from sourcing and production optimization, and cost savings in purchasing, production, logistics, and SG&A. The Company, in fact, expects the combination to be immediately accretive to earnings per share.

Pilgrim’s Pride forecasts incremental annual revenue of nearly $2.0 billion as a result of the transaction.

Moy Park Aims to Accelerate its Growth Plans Through the Deal

Janet McCollum, Chief Executive Officer at Moy Park, highlighted that the deal with Pilgrim’s Pride is a positive development for Moy Park and all of its colleagues employed across the business. Becoming a part of Pilgrim’s Pride would give Moy Park an opportunity to accelerate its growth plans, share best practices, and leverage Pilgrim’s Pride’s expertise and operational excellence. On the other hand, Moy Park offers Pilgrim’s Pride a platform for growth in Europe. Moy Park brings to Pilgrim’s Pride a fully integrated, market-leading platform with over 800 farmers across the UK.

The Company processes over 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. An important thing to note is that both the Companies have a long heritage in agriculture and poultry production and share the same values.

Financing Details

Pilgrim’s Pride intends to fund the transaction by a combination of existing cash on hand, existing credit facilities, and a Subordinated Seller Financing Note issued by a wholly owned subsidiary of Pilgrim’s Pride to JBS S.A., which the Company plans to replace with the issuance of permanent financing.
The Company expects strong cash flow generation and additional cash flow from the acquisition would help it maintain its strong credit profile and also provide sufficient free cash flow for facilitating further strategic acquisitions.

A Special Committee for the Transaction

As of now, a Special Committee of the Pilgrim’s Pride’s Board of Directors has unanimously approved the transaction. This Special Committee comprises of independent equity directors David E. Bell, Michael L. Cooper, and Charles Macaluso. The Board of Directors has delegated the Committee full authority with respect to the transaction.

Mr. Cooper, Chairman of the Special Committee, stated that the independent directors on the Special Committee have conducted a comprehensive review of the transaction, including the valuation and the potential strategic benefits of this acquisition. The review also included the receipt of a fairness opinion from Pilgrim’s Pride’s independent financial advisor. Based on the review, the Committee has concluded that the acquisition of Moy Park on negotiated terms is in the best interest of Pilgrim’s Pride and its shareholders.

No Change in Headquarters and Management

Pilgrim Pride values the importance of the local business model and is dedicated to its team members across its global operations. Thus, Moy Park will remain headquartered in Craigavon, Northern Ireland. Moreover, Moy Park’s management team led by Janet McCollum will continue to lead the business. The remaining employees will also remain unchanged. Moy Park will operate as a business unit within Pilgrim’s Pride and will maintain its day-to-day operations as well as strategic focus.

Legal and Financial Advisors

For the transaction, Barclays is serving as the financial advisor to Pilgrim’s Pride. Evercore is acting as the financial advisor to the Special Committee of the Pilgrim’s Pride’s Board of Directors and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as its legal advisor.

Last Close Stock Review

At the closing bell, on Tuesday, September 12, 2017, Pilgrim’s Pride’s stock climbed 2.91%, ending the trading session at $28.99. A total volume of 1.51 million shares have exchanged hands, which was higher than the 3-month average volume of 1.32 million shares. The Company’s stock price soared 19.10% in the last three months, 34.96% in the past six months, and 34.90% in the previous twelve months. Moreover, the stock skyrocketed 52.66% since the start of the year. The stock is trading at a PE ratio of 14.61 and currently has a market cap of $7.19 billion.

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