The deal is expected to make Pilgrim’s one of the leading food companies in Europe, creating an integrated prepared foods business in the UK
Image: Pilgrim’s to acquire UK-based food producer.Photo: Courtesy of rawpixel/Pixabay
Brazilian food company Pilgrim’s Pride has agreed to acquire Tulip, a pig producer in the UK, from Danish Crown for £290m.
Tulip has 12 production facilities across the UK. The company claims to have a long heritage in agriculture and protein production and have nearly £1bn in annual sales and more than 6,000 team members.
Tulip provides a variety of high-quality products to retail and food service customers, through an integrated supply chain with accountability and traceability.
The deal is expected to solidify Pilgrim’s as a leading European food company, creating one of the largest integrated prepared foods businesses in the UK, which includes a portfolio of brands and retail private label solutions.
The deal is claimed to be 5.4 times Tulip’s EBITDA
The deal was approved by Pilgrim’s Board of Directors and will be funded by cash on hand. The purchase price has been calculated to have 5.4 times the implied expected earnings before interest, taxation, depreciation and amortization (EBITDA).
Pilgrim’s global CEO Jayson Penn said: “We are pleased to strengthen our European foods platform with the acquisition of Tulip Limited, which positions Pilgrim’s as a leading global prepared foods player.
“The transaction represents the logical next step in our evolution to expand our geographical footprint, enhance our value-added portfolio and reduce volatility across our business with a more stable margin profile.
“Tulip Limited’s integrated production platform, consumer ready innovation capabilities, well-invested assets, established customer relationships and strong leadership team will solidify Pilgrim’s platform for growth in the attractive UK market.”
Tulip CEO Andrew Cracknell said: “Pilgrim’s is acquiring an industry-leading farming operation, a strong team of dedicated people and a network of well-invested manufacturing sites. Our companies share a rich heritage in agriculture and food production with aligned values that put people and customers at the heart of all we do.
“The Tulip Limited leadership team and I look forward to working with our new colleagues to build upon the fantastic progress made within the business and realise our combined growth opportunities as we enter an exciting new phase.”
As part of the agreement, Danish Crown will continue to supply Danish pork to Tulip under a long-term supply agreement. It will allow Tulip to continue to provide high-quality products from continental European producers to customers and consumers.