Tag Archives: Food

Canadian McCain acquires 49% of Brazilian producer of cheese bread, Forno de Minas

McCain do Brasil Alimentos, a subsidiary of Canadian-based McCain, maker of pre-fried and frozen potatoes, has entered into an agreement to acquire a 49% stake in Forno de Minas Alimentos. The value of the acquisition was kept confidential by the parties.

Helder Mendonça, president of Forno de Minas, said the negotiations lasted about ten months. “Last year, we looked for alternatives to the Bozano fund, which had a 29.3% stake in Forno de Minas. The objective was to attract a financial partner, but the opportunity came with McCain”, he said.

According to the executive, the two companies realized that there were many affinities and saw possibilities of synergy in Brazil and abroad. “McCain is going to help us in the process of globalizing cheese bread sales”, said Mendonça. “In Brazil, I see synergies mainly in the commercial area”.

McCain operates in Brazil with the sale of frozen pre-fried potatoes, which are produced and imported from its factories located in Argentina, France, the Netherlands and the United States.

“This agreement presents a great opportunity for both companies, which have very strong brands in the Brazilian market. We trust in the success story of Forno de Minas and in the management of the Mendonça family to continue leading the company”, said Aluizio Periquito Neto, General Manager of McCain Brazil.

Under the agreement, McCain, through its Brazilian subsidiary, will acquire 29.3% of the shares belonging to the Bozano Group and a portion of the shares that are in the hands of the founders of Forno de Minas – Helder Couto de Mendonça, Maria Dalva Couto Mendonça, Hélida Stael Mendonça and Vicente Camiloti – totaling 49% of the capital.

“With this transaction, we are revitalizing Forno de Minas and we will be able to accelerate growth projects in Brazil”, said Mendonça. Without citing figures, the executive said the company intends to invest in the expansion of factories in Conceição do Pará and Contagem (MG) to develop product lines.

In the accumulated period from January to September 2017, the company recorded a net loss of R$ 18.5 million (aprox. US$ 6 million). Net revenue was R$ 232.6 million.

Forno de Minas is a family business founded in 1990. In 1999, the control was sold to the American multinational General Mills. In 2009, the founding family repurchased the business. In 2010, Forno de Minas received an investment from the Mercatto investment fund, which assumed a 29% interest. In 2013, the Bozano Group acquired Mercatto, becoming a shareholder of Forno de Minas.

In January of this year, Forno de Minas decided to cancel its registration as a publicly traded company and close its capital.

Read more about the Brazilian Food Market

Walmart to divest from Brazil: looking for partner

Walmart LogoAfter just over two decades in the Brazil, Walmart is negotiating the sale of part of its business in Brazil. The company has already started looking for a partner. But the model of the operation still depends on the proposals that are being presented to the retailer. At least four companies, including asset managers and private equity funds, are in talks with the company. They are: Advent, Catterton, Carlyle and General Atlantic.

The ongoing talks with private equity manager Advent International would involve the sale of 50% of the Brazilian subsidiary, newspaper “O Globo” reported yesterday. Both Advent and Walmart do not comment on the subject.

The US parent is taking direct care of the negotiations. Goldman Sachs has been advising the American group in the operation.

According to sources, there is a search for proposals for different options to structure this operation in the most convenient way for Walmart.

It is possible that the sale is of a minority slice or even the control of the two integrated operations (online and brick and mortar). Both options will be evaluated, according to a source. This is considered a sensitive trading, since it is not a practice for the American retailer to trade assets with investment firms. In the world, Walmart controls most of its business. In China, they have a minority partner.

When analyzing the parties interested, Catterton already has a retail operation in the country – it’s a partner in St Marche and Eataly. In the case of Carlyle, the fund also has retail operations in its portfolio – executive Hector Nuñez, president of RiHappy, was CEO of Walmart Brazil from 2006 to 2010.

Due to the complexity of the food retail business, and the results that the subsidiary has been presenting, industry executives think there is little room for a large number of interested parties.

Read More about Brazilian Retail Stocks

With 471 stores and ranking third among the largest food retailing groups in the country, Walmart did not grow in 2015 and 2016 when it achieved gross sales of R$ 29.4 billion (US$ 9 billion) – there is no data from last year. Until 2017, when it stopped detailing Brazil’s results in the world’s balance sheet, operating profits were alternated with losses in different quarters.

In the country, Walmart suffered in the past with errors in conducting the operation. There was too much interference from the headquarters, with mistaken decision making. The integration of networks bought in the country took years and the results were slow to appear. The integration process was finalized in 2016 and the subsidiary is currently running a R$ 1.5 billion plan to reform all supermarkets and hypermarkets in an attempt to breathe new life into the operation. This process is supposedly bringing some sales results to some stores.

Read more about Brazilian stocks

Unilever buys Brazilian brand of natural foods

Unilever announced this Monday (2) the acquisition of Brazilian brand Mãe Terra. The company specializes in natural and organic produce and was established in 1979. The acquisition cost was not disclosed.

Mãe Terra, which produces organig cereals, cookies and other snacks, has been growing 30 YoY and its acquisition is an attempt from the global giant to become relevant in the organic market in Brazil.

The acquisition is still pending standard  regulatory approvals

JBS S.A. upgraded by Fitch Rating to BB+

JBS S.A. (BM&FBOVESPA: JBSS3, OTCQX: JBSAY, “JBS” or “Company”) communicates to its shareholders and to the Market in general that Fitch Ratings (“Fitch”), a rating agency, upgraded JBS S.A. from BB to BB+, with stable outlook.

According to the Fitch report, “the upgrade reflects JBS S.A.’s strong products and geographical diversification, as well as the successful integration of several acquired businesses over the past few years. It also factors in the strengthening of its business profile due to the recent acquisitions in the U.S., Europe and Australia. (…) Further, Fitch expects the company to report strong performance in all of its divisions in 2015 and 2016.”

The report also emphasized that “JBS S.A.’s ratings are supported by its strong business profile as the world’s largest beef and leather producer and its overall product diversification into poultry, beef, pork and to prepared foods.”

This upgrade underlines the Company’s commitment to operational excellence, free cash flow generation, financial discipline and value creation to its shareholders.

JBS Announces the Conclusion of the Acquisition of Moy Park

JBS S.A. (“JBS” or “Company” – BM&FBOVESPA: JBSS3; OTCQX: JBSAY), in continuity to the announcement made in the Material Fact of June 21st, 2015, communicates to its shareholders and to the market in general, pursuant to CVM Instructions No. 10 and 358 of January 3rd 2002, as amended, that it concluded today the acquisition of 100% of the ownership of Moy Park Holdings Europe Ltd. (“Moy Park”).

The Company obtained the necessary regulatory approvals from the competent antitrust authorities, including the European Commission, to conclude the transaction without restrictions.

The closing value was composed by: (i) payment of US$1,212.6 million to Marfrig; and (ii) Moy Park net debt assumed by JBS in the total amount of US$293 million which includes Notes totaling GBP300 million due in 2021. The value paid is slightly higher than the amount of US$1,190 million previously announced due to variation in working capital and in net debt in the period between the signing of the agreement and the closing of the transaction, as originally agreed by the parties.

Moy Park has a history of more than 70 years, being a leader in high value added categories and a reference in the development and innovation of food products. With revenue of R$5.5 billion in 2014, of which 51% came from prepared further processed products, Moy Park customer base includes the main retailers and foodservice chains in UK and Continental Europe.

“This transaction is in line with our global strategy in expanding our portfolio of prepared and convenient food products. In addition, we see potential to expand our customer base in Europe, with a vertically integrated production, with innovation and strong brands”, stated Wesley Batista, Global CEO of JBS.

JBS S.A. Announces the Successful Syndication of the Financing (Term Loan) for the Acquisition of Cargill Pork Business in the United States

JBS S.A. (BM&FBOVESPA: JBSS3, OTCQX: JBSAY, “JBS” or “Company”) communicates to its shareholders and to the market in general, pursuant to CVM Instruction 358 of January 3, 2002, as amended, that on August 18, 2015, through its indirectly controlled subsidiary, JBS USA, LLC, it has successfully syndicated to the market US$1.2 billion aggregate principal amount of borrowings in the form of incremental term loans to JBS USA, LLC’s existing credit agreement (the “Incremental Term Loans”).  The Incremental Term Loans will have a final maturity of seven years from the date of the Cargill Acquisition (as defined below) and bear interest at a rate equal to the LIBOR rate plus 3.0% (with a minimum LIBOR rate of 1.0%).

The proceeds from the Incremental Term Loans will be used, together with cash on hand, to pay the consideration for the previously announced acquisition of certain assets, properties, and rights of Cargill Meats ownership in Cargill Pork LLC (the “Cargill Acquisition”).  The consummation of the Cargill Acquisition is subject to customary closing conditions, including receipt of requisite antitrust approvals.

The joint bookrunners for the financing were Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Pierce, Fenner & Smith Incorporated and Rabobank, New York branch.

Got MIlk? Got Meat? BR Foods has strong brands in the meat processing and dairy industry in Brazil

BR Foods owns three very strong brands in the food market in Brazil: Perdigão, Sadia and Batavo. With more than 55,000 employees, it is one the largest Brazilian processed food companies. Its international operations reach more than 140 countries. The firm sells over 3,000 products both domestically and abroad, with a focus on the sale of processed food products, poultry, pork, beef, and dairy products.

Sadia and Perdigão are in the processed meat industry and used to be the two major players in the market until they merged in 2008, creating Brazil Foods. Batavo is the leading brand in dairy products in Brazil.

In a scenario where the middle-class is growing quickly in Brazil, BR Foods is well positioned to take advantage of this growing demand.

Also, BR Foods brands should allow it to pass to the consumers the rising costs from agricultural commodities, thus providing a nice inflation hedge.

Below is the full list of products BR Foods sell in Brazil and abroad (click the images to enlarge):

BRFS Products Brazil
BRFS Products Export
Easy Brazil Investing Rating
Brasil Food’s competitive advantage is built on its brands, distribution network and scale. All these factors along with the exposure to fast-growing markets, grant BRFS the 5 star EBI Rating.

BRF-Brasil Foods S.A.

Website https://www.brf-br.com/ri/
Industry* Food Products
Bovespa Ticker BRFS3
EBI Rating 5-star