October 11, 2012

Equity companies may bid for Inghams

Private equity companies, Blackstone (US) and Affinity Equity Partners (Hong Kong) may be bidding for Australia's poultry processor, Inghams Enterprises.

The indicative bids for the business are expected to be launched next week, and the sale is expected to fetch about US$1.42 billion , which is about six or seven times Ingham's fiscal 2013 earnings.

Global buyout companies and international trade buyers are also showing interest over the acquisition of Inghams.

The sale is likely to be finalised before the end of 2012.

In July 2012, Ingham's only shareholder, Bob Ingham, put the business up for sale and appointed Investec Bank to handle the divestment.

It was reported that the daily operations of Inghams will continue as usual under the direction of CEO Kevin McBain and his team until a deal is finalised.

The sale process will be closely evaluated by the Australian Competition and Consumer Commission (ACCC), as both Inghams and rival poultry firm, Baiada, whose main customers include Coles and Woolworths respectively, control 75% of the 834,000 tonnes per year chicken meat market in Australia.

Australian food companies have been attracting interest from private equity firms and other Asian buyers over the past two years, due to strong sales despite a slowdown in the economy...