Sweden's Scandi Standard AB has announced that it has entered an agreement to acquire Manor Farm, a chicken processor in the Republic of Ireland.
The deal will see an approximate sum of €94 million for the acquisition through a combination of €6 million Scandi Standard shares (“Consideration Shares”), an earn-out mechanism, worth €25.4 million, a cash sum of €36.3 million and the settling of any outstanding interest-bearing debt.
Completion of the transaction is subject to customary conditions, including approval of proceedings at an Extraordinary General Meeting of Scandi Standard. The Swedish poultry company expect the transaction to close during the second half of Q3.
Scandi reports that its rationale for the transaction is that Manor Farm is a ‘profitable and well-run operation’ and is a ‘clear market leader in a market with strong preference for local produce’, with a ’capable and experienced management team boasting a strong track record’.
'Alignment Of Interests'
Leif Bergvall Hansen, chief executive of Scandi Standard, said, “We are also pleased that the financial criteria are met in terms of expected EPS accretion and an attractive acquisition multiple. Furthermore, the limited upfront cash consideration leaves our leverage ratio largely unaffected by the transaction, which is an important criterion in terms of allowing a competitive direct yield going forward.
“Finally, the transaction structure secures alignment of interests and clear incentives for management to further develop the business. We look forward very much to being part of the Irish food processing industry and to building on the strong relationships of Manor Farm in that market.”
Vincent Carton, CEO of Manor Farm, added, “In considering a succession of ownership for our family business, my brother Justin and I have been determined to find a partner that can continue to build on our strong relationships with customers, employees, suppliers and the broader communities in which we operate. As the next generation of Cartons have chosen to pursue other business interests, we set out to find a partner with high standards, a culture similar to our own and the capability to develop the business to its fullest potential.
“We believe that Scandi Standard is the ideal partner, and we are delighted to have agreed a transaction structure that allows the current management to remain fully in place and that also allows the Carton family to become shareholders in Scandi Standard.”
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Aidan O’Sullivan. Click subscribe to sign up to ESM: The European Supermarket Magazine.
