November 18, 2013

Sigma files cash tender offer for Campofrio's acquisition

Sigma Alimentos, S.A. de C.V. (Sigma) has filed with the Comision Nacional del Mercado de Valores (CNMV) of Spain, through one of its wholly owned subsidiaries, a cash tender offer for 100% of the equity shares of Campofrio Food Group, S.A.

The acquisition was at €6.80/share (US$9.20) equivalent to €675 million (US$911 million) equity value and €1,119 million (US$1.5 billion) enterprise value. This price per share represents an 18.7% and 25.9% premium over the 45 and 180 day volume weighted average trading price, respectively. Sigma will fund the potential acquisition through a fully-committed term loan.

The offer will become effective upon its approval by the CNMV. As part of the transaction, Sigma has already signed purchase agreements with certain Campofrio shareholders which together represent 45.8% of the company's outstanding equity. As part of those agreements, Pedro Ballve, member of the founding family of Campofrio, is also co-investing with Sigma to participate in the new venture as a shareholder and Chairman of the Board.

"The acquisition of Campofrio represents a unique opportunity to enter the European market with leadership positions, strong brands and a highly qualified management team," said Mario Paez, CEO of Sigma. "We expect to build on the great platform that the company's management, led by Pedro Ballve, has already established. We will work together to take Campofrio to even higher levels of customer satisfaction, personnel development, growth and profitability," he added.

Pedro Ballve, Campofrio's Chairman of the Board said: "I am very excited about the strategic partnership between these great organisations and confident this venture further solidifies Campofrio's long term prospects for all stakeholders."

By leveraging on Campofrio's top management, strong brands and European footprint, Sigma believes it can drive further value by accelerating the implementation of the company's announced strategic plan; achieving economies of scale; implementing best practices across both organisations; introducing both companies products across each other's geographies and capitalising on the expected improvement in the macroeconomic environment in Europe in the medium term.

Sigma is the market leader in processed meats in North America and in cheeses in Mexico. The company is the largest hot dog maker in North America. It produces a wide variety of processed meats, cheese, yogurt and prepared meals, which it markets under leading brands, some of which have in place for more than 70 years.

Campofrio Food Group (Campofrio) is the leading European food company in the processed meat market. Its products, which are sold under well established and leading brands, cover a wide range of processed meat categories, including cooked ham, dry sausages, dry ham, hot dogs, poultry products, cold cuts, pâtés and ready meals.