Cerberus touted as buyer of Nutreco's Iberian feed and meat business

The investment firm is set to come out tops in a bidding war involving other private equity firms for Nutreco’s Spanish and Portuguese compound feed and poultry processing activities, according to an article today in El Confidencial. 

The report said the deal is to close next month, with Cerberus set to pay in the region of €250 million for the Iberian operations.

No decisions have been made ​

Mark Woldberg, communications spokesperson for Nutreco, told this publication today that he could not comment on market speculation regarding an approach by the New York headquartered Cerberus for the Iberian assets.

“Our Spanish meat and compound feed businesses is the subject of a process and no decisions have been made. ​

We do not comment on speculation and have nothing to add at this stage. Any further announcements will be made as and when appropriate.”​ ​

Iberian operations under review since July ​

In 2013, revenues for the Dutch firm's Spanish and Portuguese businesses were around €1.4 billion. They had an operating profit of €40m and 3,500 employees.

The Dutch feed giant announced its intention to divest of the Iberian division back in February, citing the poultry and compound feed assets, which had been acquired from Cargill in 2009, as non-core business. 

But the move to sell the Spanish and Portuguese businesses had been kick-started some months prior to that.

With Nutreco looking to focus on premix, feed specialties and fish feed, it had put the division under review back in July 2013.

Integrated business ​

“I think it holds true,”​ said ABN AMRO analyst, Maarten Bakker, talking to FeedNavigator.com about the reported move by Cerberus. 

“I had a meeting recently with a feed producer who had put a feeler out to Nutreco about buying the compound feed side only of the Spanish operations. ​ ​

But that feed manufacturer was told that the poultry processing and feed assets, as they were an integrated business, ​were being divested in one lot.  ​ ​

And as this process was started some months back, it is highly likely that negotiations are already at an advanced stage with Cerberus for the complete entity,” ​said Bakker.

Growth in premix, specialty and fish feed by acquisition ​

The company last month said it expected to continue to grow through acquisition but not at the pace that had been foreseen in 2011. “We will realize one or two acquisitions per year,”​ said ​Woldberg.

Bakker said the Dutch group is focusing on buying small companies in the emerging markets of Asia, Latin America, Russia and Africa as that is where it sees the greatest demand for animal protein consumption.

“Nutreco sees the acquisition pipeline filled with premix, specialty and fish feed regional players. There will be no big add-ons. ​

The price for multiples in those regions is very high. It can’t afford them,” ​said Bakker.​

Last year the animal nutrition company acquired shrimp feed producer Gisis in Ecuador and Hendrix Misr in Egypt. 

February saw it announce the opening of two new premix plants in Vietnam and Indonesia as well as a remodeling of its Chinese plant in Ziangtan.