Pilgrim’s CEO Bill Lovette said that mergers and acquisitions (M&A) are being heavily considered as part of the growth plan for the second-largest poultry company in the United States. He adds that the size of a company to be acquired is not as important as the potential value it would add for Pilgrim’s shareholders.
After revealing that Pilgrim’s enjoyed an 80 percent increase in net income for the first quarter of 2014, Lovette addressed the Pilgrim’s growth plan during a quarterly earnings call with shareholders on May 1. One analyst asked Lovette if Pilgrim’s would be willing to acquire a company as big as Michael Foods, the food and egg processing company that is in the process of being purchased by Post Holdings for a price of $2.45 billion. Lovette replied that a purchase of that magnitude is “not outside of the realm of possibility.”
“We have an extremely strong balance sheet. Today we’re seeing a lot of demand for our balance sheet to be re-levered in a way that creates shareholder value long-term. We’re not afraid to look at a big deal,” said Lovette. “We’re very busy right now making a lot of evaluations in M&A. We see that as a strategic part of our growth plan in the future.”