Deals



Offer made by Cargill to acquire Provimi for EUR 1.5 billion


Posted: 18th August 2011 10:30

The Provimi Group, a leading, global animal nutrition business, has announced that a binding offer has been received from Cargill to acquire Provimi from the Permira funds for an enterprise value of EUR 1.5 billion. Provimi has agreed with Cargill to commence the necessary Works Council consultations and appropriate anti-trust processes, on an exclusive basis.

A combination of Provimi and Cargill is strategically compelling and would create a powerful force in the global animal nutrition market. With complementary businesses, the two companies would be an excellent fit geographically and culturally.

Cargill, one of the largest private companies in the world, is an international producer of food, agricultural financial and industrial products and services and has a strong and growing animal nutrition business.  

For Cargill, Provimi facilitates a significant move into the high value added premix and specialties segments as well as bringing strong positions within the emerging markets of Latin America, Russia and Asia. Provimi and Cargill have a strong cultural fit with a core emphasis on values and people. The wealth of talent within Provimi, including within our Feed Solutions organization, together with the strong Provimi brand are key reasons for the acquisition.

For Provimi, Cargill’s commitment to animal nutrition, its scale and competitive advantages make it an ideal partner to take its business to the next level. Cargill could deliver economies of scale including sourcing opportunities, potential for a more efficient production base and  access to new markets and growth opportunities; It is committed to invest further to grow the business and will provide  enhanced career opportunities for our people within a global organization, including the ability to exchange expertise with its broad range of businesses.

Since the Permira funds acquired Provimi in 2007, Provimi’s management team has transformed the business from a group of decentralised businesses into an integrated and higher performing, international organization through its One Provimi strategy. Today, Provimi is a pure animal nutrition solutions business positioned in the centre of the value chain, with innovative solutions at its core.  It has disposed of non-core assets such as its Fish Feed and Pet Foods activities and made strategic acquisitions to enhance its geographic footprint including the acquisition of NASSA in Mexico last year. 

The transformation process has delivered excellent financial results with continuous EBITDA growth since 2007. EBITDA for the first half of 2011 was EUR86m, up 20.3%. Earlier this year Provimi’s Board concluded that the group was ready for the next stage of its growth and began a strategic review to examine the options for the future.  Reaching an agreement with Cargill represents a highly attractive outcome from that review process.

Commenting on the transaction, Ton van der Laan, Chairman and Group Chief Executive Officer of Provimi, said

“Cargill provided a clear and compelling case to become our new owner and we believe that a combination of its animal nutrition business with Provimi will create a stronger business, improving the delivery of innovative nutritional solutions to our customers.  With Cargill’s global presence and committed focus on animal nutrition, we can take Provimi to the next stage of its development.  For our people this is also a great outcome.  Cargill can offer many opportunities and recognizes the talent within Provimi. We very much look forward to working with our new owners in the future”.

Paul Conway, Vice Chairman, Cargill Inc added:

Today’s acquisition is a significant move for Cargill into the higher value added segments in the animal nutrition market.  Provimi has world-class expertise, knowledge and strong technical know-how, an area that we believe is key to the future of the industry.  The wealth of talent within Provimi, along with its strong, established brand, makes it an exciting opportunity for Cargill.  We also believe we offer Provimi many advantages to help its business grow, including our own strong brand and values, access to new markets and opportunities and the ability to share in our knowledge. We look forward to working with Provimi.”

Charles Sherwood, Partner at Permira, said:

“Provimi is a very different business today than when the Permira funds bought the company nearly five years ago. In that time, the new leadership team has created a fully integrated, global animal nutrition business, strongly positioned in high growth emerging markets and with a clear strategy of industry-leading product innovation. We are both proud to have been associated with this transformation and delighted to see the company progress to its next phase of development with such a strong new partner in Cargill.”

Provimi and Permira were advised by JP Morgan and Freshfields.

 


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