Affinity approaches bankers ove possible sale of Tegel Foods

Affinity approaches bankers over possible sale of Tegel Foods

By Suze Metherell

July 29 (BusinessDesk) - Affinity Equity Partners, the pan-Asian private equity firm, has approached a number of investment banks as it looks to sell New Zealand's largest poultry business, Tegel Foods.

Investment bankers have confirmed to BusinessDesk that Affinity is considering a trade sale or initial public offering of the Auckland-based poultry business. The Australian Financial Review yesterday reported the sale could fetch A$900 million.

Affinity bought Tegel from Pacific Equity Partners in 2011 for a reported $600 million, and since then has divested the company's property, including the sale of two long-lease chicken processing plants to buyers including Wellington-based Caniwi Capital for $60 million in July 2013.

Tegel reported a profit of $14.1 million on sales of $517.2 million in the year ended April 27, 2014, the last accounts filed by holding company Ross Group Holdings. At balance date, the company had bank borrowings of $214.9 million, which were repayable in two years, and $60.4 million of mezzanine debt, repayable in three years.

The majority of New Zealand's chicken industry is owned by private equity investors after Inghams Enterprises (NZ), the country's second-largest poultry producer, was sold, along with its Australian parent Ingham Enterprises, to TPG for A$880 million in June 2013.

Dutch agricultural lender Rabobank has forecast global demand for poultry will increase 60 percent to become the most consumed meat globally by 2030.

(BusinessDesk)

© Scoop Media