Cherkizovo completes acquisition of poultry integrator
Cherkizovo Group one of Russia's leading integrated and diversified meat producers has completed the transaction to acquire 100% of Mosselprom.
Mosselprom is a multi-industrial agro holding, that comprises poultry production and feed production, as well as land cultivation and cropping. The transaction has been approved by the Russian anti-monopoly authorities.
The inclusion of this large producer into the Group brings one of the best known Russian brands to Cherkizovo’s consumer portfolio, significantly increasing the scope of the Group’s activities, said the company in a statement. The transaction will strengthen Cherkizovo’s position in the high-margin Moscow region market and will also increase Cherkizovo’s market share in Russia’s poultry segment (in 2010 Cherkizovo Group had 7% of the market and Mosselprom had 2%).
The assets of Mosselprom which will be included in Cherkizovo Group’s structure includes four poultry factories for broiler breeding – production in 2010 was approximately 56,500 tonnes of sellable weight; three incubation facilities with total annual capacity of 68 mln eggs per year; and three slaughter facilities with the capacity to process 215 000 heads per day. The factories have implemented HACCP system and comply with European Union quality requirements.
The transaction is based on an enterprise value of $252.9 mln for Mosselprom, comprising $183.8 mln of debt and $69.1 mln of equity. Cherkizovo Group will assume the acquired company’s debt, which is mostly long-term and subsidized. Of the equity, $27.0 mln will be financed through an additional ordinary share issue as previously announced, and the remaining $42.1 mln has been paid in cash from the Group’s own funds.
“The transaction to acquire Mosselprom is one of the most significant steps that we have taken in the development of our rapidly growing business, and it will make a profound contribution to the Group’s growth in the years to come, as already in 2011 poultry production is expected to increase by 50% compared to 2010 levels,” said Sergey Mikhailov, CEO of Cherkizovo Group.
Source: Cherkizovo Group
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