GREELEY, COLO. — Pilgrim’s Pride Corp. has reached agreement to acquire the Meats and Meals business of Kerry Consumer Foods in the United Kingdom and Ireland for approximately $952 million.
The purchase amount represents an 8.5x multiple on implied expected standalone EBITDA for 2021. The acquisition is expected to close in the fourth quarter.
“We are pleased to have the opportunity to position Pilgrim’s as a leading prepared foods and branded products player through the acquisition of Kerry Consumer Foods’ Meats and Meals business,” said Fabio Sandri, chief executive officer of Pilgrim’s. “The transaction enhances our value-added portfolio by adding market-leading brands such as Denny, Richmond and Fridge Raiders, which we expect to deliver a higher and more stable margin profile.
“We look forward to welcoming Kerry Consumer Foods’ Meats and Meals business’ talented management team and other team members, led by Nick Robinson, to the Pilgrim’s family, and we look forward to working together to drive growth and deliver value for all of our stakeholders.”
Kerry makes branded and private label meats, meat snacks and food-to-go products in the United Kingdom and Ireland, while Kerry Meals provides ethnic chilled and frozen ready meals in the United Kingdom. The combined businesses generated more than $1 billion in annual sales during the year ended Dec. 31, 2020.
Pilgrim’s said the Kerry team also has a proven track record of innovation with the successful launch of its branded meat-free products.
“Pilgrim’s is already strongly positioned within the global protein market, and this complementary acquisition provides further breadth into the prepared and branded products segment,” Mr. Sandri said. “The inclusion of the Kerry Consumer Foods’ Meats and Meals business follows our strategy of a well-balanced portfolio of products, geographies and customer base. We believe that the acquisition will also enable the company to develop new and innovative products through the businesses’ combined expertise to support our key customers’ growth objectives.”
Kerry said proceeds from the sale will be used for general corporate purposes and the continued strategic development of the company’s Taste & Nutrition business. The company said it now plans to separate and realign its remaining dairy-related activities within the Consumer Foods Business. The strategic review of the dairy business has been completed and there will be no disposal of the dairy business at this time, Kerry said.
“Kerry’s strategy for the past 30 years has been to continuously evolve our portfolio, as we progressed on our journey to becoming a market-leading Taste & Nutrition company,” said Edmond Scanlan, CEO of Kerry. “This transaction further enhances Kerry’s focus as a leading business-to-business ingredient solutions provider for the food, beverage and pharmaceutical markets. Pilgrim’s is a global provider of high-quality food products, and I am convinced they will make an excellent future owner of the Meats and Meals business. I wish to thank the 4,500 employees of the business for their contribution to Kerry over many years.”