Neogen expands South American presence in distributor buyout

By Aerin Einstein-Curtis contact

- Last updated on GMT

© GettyImages/ricardoreitmeyer
© GettyImages/ricardoreitmeyer

Related tags: Feed additives, Feed safety, acquisition, South america

Neogen Corporation is seeking to grow its presence in export markets including in animal producing regions of Uruguay and Argentina with the acquisition of Productos Quimicos Magiar.

The financial terms of the deal were not disclosed.

Magiar was founded in 1991, and has marketed diagnostic products for animal feed and food quality control.

With the acquisition, the former Magiar operations will stay in the two countries and provide Neogen with a physical presence in the important agricultural Southern Cone region of South America, which has large beef and dairy populations with significant export markets. The operations will be managed through Neogen’s Latin American operations and will now offer direct sales of Neogen food safety, animal safety and genomic products into Argentina and Uruguay.

Michigan based, Neogen, develops and markets products focused on animal safety, including antibiotics, pharmaceuticals, vaccines, food safety, genomics and toxicology. It has a presence in the US, Mexico, China, Australia, Europe and Brazil. It has had a 20-year relationship with Magiar, which acted as a distributor of Neogen’s food safety diagnostics for businesses in Argentina and Uruguay. 

The deal helps expand Neogen’s footprint, its product offerings in Argentina and Uruguay, said Rod Poland, director of corporate communications at Neogen Corporation.

“Short term, it is about margin expansion – we were already selling through them on our food safety side,” ​he told FeedNavigator. “But long term, it allows us to expand the market operations, which includes the animal safety side of products and genomics – we’ve got a better footprint to serve that market going forward.”

Global markets are becoming more valuable, especially for their trading ability with countries like China that are net imports of products, he said. “We really view South America as an exporter,”​ he added. 

Argentina is the world’s fourth largest exporter of beef and veal, behind Brazil, India and Australia, and Uruguay is the seventh largest. Argentina is also a leading exporter of milk. 

Source: USDA’s Foreign Agricultural Service (FAS)

“Certainly, Brazil is leading the charge there, and I think that Uruguay and Argentina are going to follow suit as net exporters,” ​he said. “That’s where we can play a role.”

Neogen has retained key Magiar personnel to ensure consistent customer service, it said.

Company growth plans, development

Acquiring its distributors is a long established strategy for growth at Neogen, said Poland.

“We’re pretty heavily based on acquisitions. We like to buy technologies, but we also like to buy our distributors, so we get better global coverage,”​ he added.

The company has also acquired sites in Scotland with the ambition of establishing a European center, he said.

“We did the same thing in Brazil where we bought our long-term distributor and then we bought a genomics company and an insecticide company," ​said Poland.

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