Affinity-backed Tegel gets $310m buyout offer
Tegel Group, a poultry producer in which Affinity Equity Partners is the largest shareholder, has received a privatization offer from Philippines-based Bounty Fresh Foods that values the business at approximately NZ$438 million ($310 million).
The offer of NZ$1.23 per share represents a 50% premium to the April 24 closing price of NZ$0.82. Tegel would also be permitted to pay a dividend of NZ$0.041 per share prior to the offer closing, according to a filing. The stock closed up nearly 37% at NZ$1.12 on April 26, the highest it has reached since early February.
Affinity has already agreed to the buyout offer. The private equity firm holds a 45% stake in Tegel, or 160.2 million shares, which means it stands to receive around NZ$197 million from Bounty Fresh, plus any dividend. It has already taken money out of the business. Tegel raised NZ$298 million in its IPO in 2016, selling shares at NZ$1.55 apiece, with Affinity reducing its stake from 87.4% to 45%.
The GP bought Tegel in 2010 at a valuation of NZ$605 million. The business was majority-owned by Pacific Equity Partners (PEP), which had acquired it in late 2005 through a carve-out from Heinz. PEP sold 44% and ICG 3% in 2008. ICG made another investment in Tegel alongside the Affinity deal.
Founded in 1961, the company is responsible for about half of New Zealand's poultry and manufactures a range of other processed meat products, including sausages, for which it is the country's second-largest producer. It has a network of 38 breeder farms, three hatcheries, 93 farms, three processing plants, and five distribution centers.
Tegel produced 99,806 tons of poultry in the 2017 financial year, up from 93,149 tons the year before. Over the same period, revenue went from NZ$582.4 million to NZ$614 million, while underlying EBITDA was more or less flat at NZ$75.6 million, and net profit rose from NZ$11.3 million to NZ$34.2 million.
The Philippines is already one of the company's top five export markets after signing a distribution agreement with a local restaurant player. Bounty Fresh is the only fully-integrated poultry producer in the country, supplying hotels and restaurants, caterers, and supermarkets. The company is best known for its own-brand fresh chicken and frozen chicken nugget products.
More on Australasia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.