Brazilian meat giant JBS has struck a deal to buy Australian ham and bacon producer Primo Smallgoods for A$1.45bn (US$1.26bn).
Affinity Equity Partners, which owns 70% of Primo, and the Lederer family, which co-founded the business, have agreed to sell the owner of brands including Primo Quality Meats, Hans and Beehive.
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“This acquisition is strongly aligned with our global strategy to expand our presence in the value-added product category and well-known brands,” JBS CEO Wesley Batista said. “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.”
JBS, which has ten processing facilities in Australia, forecast “incremental annual revenue” of around A$1.6bn and EBITDA of A$150m from Primo. It also set out plans to generate around A$30m in synergies from the deal.
The company does not break out financial figures for its own business in Australia, grouping the business under its JBS USA subsidiary, alongside its operations in Canada.
In 2013, revenue from JBS totalled US$18.62bn, an increase of 6.5% compared to 2012. EBITDA for the year was US$375.8m, representing a growth of 67.9% versus a year earlier.
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By GlobalDataIn its results statement for 2013, JBS said: “The operation in Australia continues to deliver solid and consistent results, influenced by strong demand from Asian countries, especially China, which imported from JBS Australia 58.9% more in 2013 compares to the previous year.”
Affinity invested in Primo in 2011, with reports at the time valuing the deal at around A$900m.
Click here for our analysis of JBS’s move for Primo.
