Affinity's Tegel may be heading for NZX 50 as fund managers 6 Oct 2015
Related articles
- NZ consumers grow more upbeat, may resume spending Business
- Knowles quits as CEO of KiwiBank Business
- NZ migration bolstered by British invasion Migration
- NZ manufacturing activity reaches highest since 04 Business
- NZ dollar hits 22-month high vs euro Business
- OceanaGold finds new gold deposits at Fraser mine Business
- Transpower gets go-ahead for $170m SI upgrade Business
- NZ home sales creep up in March, still subdued Property
- NZ economy expands at fastest pace in two years Business
- New Zealand food prices fall in February Business
Affinity's Tegel may be heading for NZX 50 as fund managers warm to chicken business
By Jonathan Underhill
Oct. 6 (BusinessDesk) - Tegel Foods may be headed for the NZX 50 Index in an initial public offering that could value Affinity Equity Partners' New Zealand poultry business at about $800 million, although there is a question mark about whether the sale could be completed this year.
Affinity hired Goldman Sachs and Deutsche Bank in August for advice on sale options for New Zealand's biggest chicken producer, which it acquired from Pacific Equity Partners in 2011, reportedly for $600 million. Executives at Tegel have met Charoen Pokphand Group, Thailand's biggest private company, and JBS, the world's biggest meat processor, as part of the sales process, the Australian Financial Review's Street Talk column reported today. BusinessDesk understands that while a trade sale is possible, an IPO is the default scenario.
Tegel and its advisers have just completed an unofficial roadshow to make the case for a share sale with institutional investors in New Zealand. Fund managers who declined to be named said the business appeared to be in reasonable order and was "worth a look" although as with all companies coming to market, the success of an IPO would come down to price and market conditions. One investor said Tegel would need to press on if it wanted to get a sale away before Christmas.
The financial statements for Tegel's immediate parent in the year ended April 26 show earnings before interest and tax rose 5 percent to $45.8 million, and revenue grew 8.8 percent to about $563 million. Ross Group Holdings refinanced $204 million of bank borrowings, $67.9 million on a mezzanine facility and settled interest rate swap contracts with a new three-year bank facility on Aug. 7, the annual report shows. Annual finance costs were little changed at $35 million in the 2015 year, when interest rates on the company's debt ranged from 7.5 percent to 15 percent.
An IPO could leave Affinity with anywhere from 20 percent to 50 percent of the company, although it is believed to be targeting 30 percent to 35 percent and would retain a holding to benefit from upside in the business. Its shares would likely be subject to an escrow arrangement following an IPO. At $800 million, the company would be bigger than Summerset Group Holdings and Nuplex Industries.
Since buying the business in 2011, Affinity has sold property including two long-lease chicken processing plants to buyers, among them Wellington-based Caniwi Capital. A share sale would allow investors to gain exposure to a poultry industry that has been predominantly owned by private equity.
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.
(BusinessDesk)
News
Hilary Timmins' Award-Winning UK Documentary Series To Inspire NZ Students
29 Jun 2020 Education
Dream Catchers, produced and directed by Hilary Timmins, celebrates the success stories of more than thirty inspirational New... more
New Zealand reaffirms support for Flight MH17 judicial process
7 Mar 2020 News
Ahead of the start of the criminal trial in the Netherlands on 9 March, Foreign Minister Winston Peters has reaffirmed the need to... more
Business
NZ Government's Economic package to fight COVID-19
17 Mar 2020 Business News
The Coalition Government has launched the most significant peace-time economic plan in modern New Zealand history to cushion the... more
NZ Government announces aviation relief package
19 Mar 2020 Business News
Transport Minister Phil Twyford today outlined the first tranche of the $600 million aviation sector relief package announced earlier... more
Living
Diversity was Key at New Zealand Trade Tasting in London
6 Jun 2022 Food & Wine
New Zealand Winegrowers Annual Trade Tasting was recently held in London, on Wednesday 4 May, in Lindley Hall.
It was the first... more
Kiwi author stuns Behind the Butterfly Gate
12 Jan 2022 Arts
Hidden behind the Butterfly Gate is where the secret has been kept for 76 years...
New Zealand writer Merryn Corcoran’s... more
Property
Fairer rules for tenants and landlords
17 Nov 2019 Property
17 NOVEMBER 2019
The Government has delivered on its promise to the over one million New Zealanders who now rent to make it fairer... more
New Zealand Government will not implement a Capital Gains Tax
17 Apr 2019 Property
The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern... more
Migration
Boosting border security with electronic travel authority – now over 500,000 issued
19 Nov 2019 Migration
19 NOVEMBER 2019
We’ve improved border security with the NZeTA, New Zealand Electronic Travel Authority, which helps us to... more
Christchurch reinstated as refugee settlement location
18 Aug 2018 Migration
18 AUGUST 2018
HON IAIN LEES-GALLOWAY
The announcement that Christchurch can once again be a settlement location for refugees... more
Travel
Gallipoli Anzac Day services cancelled
19 Mar 2020 Travel & Tourism
The New Zealand and Australian Governments have announced this year’s joint Anzac Day services at Gallipoli will be cancelled... more
New Zealanders advised not to travel overseas
19 Mar 2020 Travel & Tourism
New Zealanders advised not to travel overseas
more
Sport
The Skipper's Diary: Sir Richard Hadlee honouring his father and NZ's Forty-Niners
27 Oct 2019 Cricket
NZNewsUK London Editor Charlotte Everett spoke to Sir Richard Hadlee about why he’s chosen to publish his father’s... more
PREVIEW: All Blacks v England semi-final
26 Oct 2019 Rugby
The two most convincing quarterfinals winners are set to square off in a semifinal showdown for the ages when the All Blacks meet old... more
Columns
Gordon Campbell on the Gareth Morgan crusade
11 Nov 2016 Opinion
Gordon Campbell on the Gareth Morgan crusade
First published on Werewolf
The ghastly likes of Marine Le Pen in France and Geert ... more
Gordon Campbell on the US election outcome
10 Nov 2016 Opinion
Column - Gordon Campbell
Gordon Campbell on the US election outcome
Well um.. on the bright side, there (probably)... more
Kiwi Success
Congratulations to Loder Cup winner
26 Sep 2018 People
25 SEPTEMBER 2018
The Loder Cup, one of New Zealand’s oldest conservation awards, has been awarded to Robert McGowan for 2018... more
Appointments to New Zealand National Commission for UNESCO
16 Aug 2018 Appointments
16 AUGUST 2018Appointments to New Zealand National Commission for UNESCO
HON JENNY SALESA
Associate Education Minister Jenny Salesa is... more
Recruitment
Historic pay equity settlement for education support workers
14 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more
Historic pay equity settlement for education support workers
22 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more