Affinity to exit Australia's Primo as JBS agrees $1.25b acquisition

The private equity firm bought a 70% stake in Primo three years ago from the founding Lederer family, which held on to the remaining 30%. Affinity's acquisition valued the business at A$740 million (then $758 million) and was supported by A$580 million in debt provided by 11 financiers.

Founded in 1985, Primo Group is the leading producer of ham, bacon and smallgoods in Australia and New Zealand. Its portfolio of brands includes Primo Smallgoods, Hans, Beehive, Hunter Valley Quality Meats and Primo Quality Meats. The company has over 4,000 employees and operates from five manufacturing plants, seven distribution centers and 30 retail outlets.

JBS anticipates incremental annual revenue of approximately A$1.6 billion and EBITDA of A$150 million as a result of the transaction, plus a further A$30 million in synergies. The company reported net revenue of BRL92.9 billion ($36.1 billion) in 2013, up 22.7% year-on-year, while EBITDA jumped 39% to BRL6.13 billion ($2.38 billion).

Primo reported EBITDA of A$104 million for 2010. Since acquiring the business, Affinity is understood to have worked on developing distribution channels in other parts of Asia. This is part of the so-called "protein theory," whereby companies look to capitalize on growing demand for premium produce - notably meat and dairy - in emerging markets.

This is not the private equity firm's only food asset in Ausralia and New Zealand. In 2011, it bought poultry producer Tegel Foods from Pacific Equity Partners.

"This acquisition is strongly aligned with our global strategy to expand our presence in the value-added product category and well-known brands. Primo Group is the leading company in this segment with strong brands and represents an outstanding opportunity to expand our business in Australia, considering the annual growth in consumption of prepared products and the prospects to increase exports of convenient products from Primo Group portfolio" said Wesley Batista, global CEO of JBS, in a statement.

JBS has been in business for more than six decades and claims to be the largest protein processor in the world, with operations covering beef, pork, lamb and chicken. It has more than 300 production facilities globally and over 185,000 employees.

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• Topics
• Exits
• Consumer
• Australasia
• Trade sale
• Exit
• Australia
• Affinity Equity Partners
• Consumer