April 5, 2011

Affinity to acquire New Zealand chicken group Tegel Foods

The sale of New Zealand chicken group Tegel Foods to Hong Kong investment firm Affinity Equity Partners looks poised for completion.

Hong Kong investment firm Affinity Equity Partners received approval from New Zealand's Overseas Investment Office (OIO) last Thursday (March 31) to take over Tegel parent company NZ Poultry Enterprises Ltd (NZPEL) for a reported NZD605 million (US$465 million).

"Affinity wanted to help Tegel to reach its full potential through further expansion, including expanding Tegel's product range," the OIO said.

Pacific Equity Partners bought Tegel from Heinz six years ago for NZD250 million (US$192.08 million) and still retains a 43% stake. ANZ Entities owns 30% of the group and the remainder is held by Tegel management and investment firms Lujeta Pty Ltd and Intermediate Capital Group.

Tegel currently controls about 52% of New Zealand's fresh and frozen chicken market. It owns breeding and processing facilities in South Auckland, Taranaki and Canterbury.

Tegel made a tax-paid profit of NZD22.6 million (US$17.36 million) for the year to end-April 2010 on revenue of NZD401.7 million (US$308.63 million).