Cargill beats off Chinese competition to land Provimi
Cargill, the world’s largest agricultural commodities trader, will acquire Netherlands-based animal feed company Provimi from private equity firm Permira for an enterprise value of EUR1.5 billion ($2.1 billion). China’s New Hope Group was among the bidders to lose out, The Financial Times reported.
Cargill plans to fund the purchase through a combination of debt and equity.
Cargill and Provimi said the complementary nature of their respective markets and product lines was crucial in securing the deal. Provimi is known for having a strong "premix" additives business, while Cargill is primarily focused on "complete feeds" sold to farmers as a package. Provimi's strength in Latin America, Russia and India is also a good fit with Carlyle's well established footprint in China and developed markets.
Permira bought a majority stake in Provimi in 2007 from CVC and PAI Partners for EUR1.3 billion, and subsequently de-listed it from Euronext. It also turned the company into a specialist animal feed provider, disposing of non-core assets such as the pet foods business and expanding its reach into emerging markets.
Credit Suisse advised Cargill on the deal, while JPMorgan worked with Permira.
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