Marfrig hopes to conclude Keystone Foods IPO in FY 2017

Leaders with Marfrig Global Foods said the company is continuing to pursue an initial public offering (IPO) for a portion of its Keystone Foods business unit, and is optimistic that the IPO can be concluded during the second half of its 2017 fiscal year.

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Adrian825, Bigstock
Adrian825, Bigstock

Leaders with Marfrig Global Foods said the company is continuing to pursue an initial public offering (IPO) for a portion of its Keystone Foods business unit, and is optimistic that the IPO can be concluded during the second half of its 2017 fiscal year.

The plans for the IPO were first revealed in an announcement to the Market on May 11.

Speaking during the Marfrig earnings conference call for the second quarter of fiscal year 2017, Marfrig CEO Martin Secco Arias said he was limited in what he could say at this time, but he did say: “We have begun the IPO process in the U.S. market and the teams continue to work on updating all of the documents required so that we can conclude the process during the second semester, of course, depending on the market.”

The call took place on August 15.

Marfrig Global Foods is headquartered in Brazil, but Keystone Foods is headquartered in Huntsville, Alabama. It is the tenth largest broiler company in the United States, according to the WATTAgNet Top Poultry Companies Database.

Plans for Keystone Foods expansion projects

Also speaking during the conference call, Frank Ravndal, CEO of Marfrig’s Keystone Division, said demand for Keystone chicken products has been heavy in both the United States and the Asia Pacific/Middle East/Africa (APMEA) region, which has the company looking at expansions.

“We’re actively investing in strategic projected that will expand both our capabilities and our capacity, including fresh beef lines, additional par-fried and fully-cooked chicken capacity, and additional grow-out capacity in the U.S. to support the growth in our further process value-added business,” said Ravndal.

In the Marfrig Global Foods quarterly earnings press release, Thailand and Malaysia were specifically mentioned as countries where the company has allocated funds to expand production capacity and increase efficiency. The investment amounted to US$50.7 million.

Keystone Foods’ quarterly results

Keystone, which accounts for about 50 percent of Marfrig’s sales, saw its sales volume grow by 2 percent for the quarter. Its net revenue increased 4 percent to US$697 million.

Also during the quarter, it achieved its highest adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) on record, at US$69 million.

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