Marfrig plans Keystone Foods initial public offering
Keystone Foods will use proceeds to finance growth and for general corporate purposes
Marfrig Global Foods intends to sell a portion of its holdings of Keystone Foods as part of an initial public offering (IPO).
The Keystone Foods subsidiary is incorporated under the laws of England and Wales, but the company is headquartered in the United States. Marfrig Global Foods is headquartered in Brazil.
In an announcement to the market issued on May 11, Marfrig stated that Keystone Foods has submitted a draft registration with the U.S. Securities and Exchange Commission. Keystone intends to use the proceeds from the IPO to finance growth and for general corporate purposes.
Keystone Foods, according to the WATTAgNet Top Poultry Companies Database, produced 23.6 million pounds of ready-to-cook chicken on a weekly basis in 2016. It is the tenth largest broiler company in the United States. It markets chicken products under the Key Farms brand.
Financial results for first quarter
The IPO announcement was made the same day Marfrig Global Foods released its financial results of the first quarter of fiscal year 2017.
Keystone Foods had a positive quarter, seeing its net revenue increase 7 percent to US$667 million, and its sales volume increase 5 percent.
As a whole, Marfrig Global Foods reported a net loss of BRL238 million (US$75.3 million) for the quarter, more than doubling its net loss of BRL102 million (US$32.3 million) during the same period on year ago.
The company, in a press release, stated that it was adversely affected by Operation Weak Flesh, which was triggered in March. Despite quick action taken by Brazil’s Ministry of Agriculture, consumer confidence was shaken and some important export destinations, including Chile and China, temporarily suspended Brazilian meat and poultry imports.