TPG makes partial exit from Australia's Inghams
TPG Capital has generated proceeds of approximately A$66.9 million ($44.3 million) through a partial exit from Australian poultry producer Inghams Group, paring its stake to below 10%.
The private equity firm sold around 18.6 million shares for A$3.60 apiece, according to a filing, and now owns 9.86% of the company. TPG realized A$375.5 million when Inghams listed in 2016, reducing its holding from 97% to 47%. Subsequent to that it completed two partial exits, taking an estimated A$210 million off the table in 2018 and A$214 million in 2019.
Shares in Inghams closed at A$3.54 on March 4, down 2.2% for the day. When TPG made its previous partial exit, the company was trading around the A$4.40 mark. Inghams experienced a substantial drop last August following the announcement that attempts to optimize processing had not gone according to plan due to high-than-anticipated demand. The cost increase put pressure on margins.
Founded in 1918, Ingham's is the largest vertically integrated poultry producer in Australia and ranks number two in New Zealand. The company has 345 facilities and farms across both countries, most of them owned and operated by third parties. Inghams also supplies various poultry, dairy, horse, and pig feeds.
The company was family-owned until TPG's acquisition. The private equity firm paid A$869 million and obtained A$625 million in debt financing. It took some money out of the business in 2014 following the sale of a portfolio of real estate assets and conversion of those properties to leaseback.
Inghams currently processes about four million birds per week, employing more than 8,000 people across 12 feedmills, breeder and boiler farms, 11 hatcheries, 14 processing plants, and nine distribution centers. The company sold 517.5 kilotons of poultry in the 12 months ended June 2019 and produced 432.5 kilotons of feed.
Over the same period, revenue increased 4.9% year-on-year to A$2.49 billion, EBITDA rose 14.2% to A$242.2 million, and net profit increased 10.1% to A$126.1 million.
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