Affinity approaches bankers over possible sale of Tegel Foods

Wednesday 29th July 2015

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 about 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.co.nz

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