Nordic company Scandi Standard AB has entered into an agreement to acquire Ireland-based chicken processor Manor Farm.
According to a press release from Scandi Standard, Manor Farm had net revenues of EUR164 million (US$187.2 million) and EBITDA of EUR13 million (US$14.8 million) in 2016.
The agreement values Manor Farm at an enterprise value, based on the closing price for the Scandi Standard shares on 26 June 2017, of EUR94 million (US$107.3 million). Settlement will be a combination of 6 million Scandi Standard shares, an earn-out mechanism, cash and the assumption of outstanding interest-bearing debt. Completion of the transaction is subject to customary conditions, including approval of the issuance of the Consideration Shares at an Extraordinary General Meeting of Scandi Standard. The four largest shareholders, representing approximately 29 percent of Scandi Standard’s share capital, support the transaction.
Scandi Standard said there were multiple reasons for pursuing this acquisition. Those included:
- Profitable and well-run operations
- Manor Farm’s status as a clear market leader in a market with strong preference for local produce
- Capable and experienced management team with a strong track record
- Tangible best practice opportunities identified
- Significant earnings per share accretion
- Risk diversification through a new geographical presence
Manor Farm sources and processes approximately 50 percent of all fresh chicken sold in the Irish retail market and approximately 25 percent of all chicken consumed in Ireland, according to the press release. The business focuses on fresh products for the retail market, selling to a diversified customer base. The business has its processing plant in Shercock in Cavan County. It has approximately 130 farmers contracted as growers and approximately 43 farmers contracted as breeders.
It also owns and operates a feed mill, which has revenues of approximately EUR80 million (US$91.3 million)and produces solely for its contracted growers. In the accounts, feed revenues will be eliminated from Manor Farm’s net revenues. Manor Farm employs approximately 850 people.
Scandi Standard is the largest producer of chicken-based food products in the Nordic region with leading positions in Sweden, Denmark, Norway and Finland. The company produces, markets and sells ready to eat, chilled and frozen products under the brands Kronfågel, Danpo, Den Stolte Hane and Naapurin Maalaiskana.