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Japfa Comfeed Merger with Multibreeder Adirama

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Review and summary of Japfa Comfeed Merger with Multibreeder Adirama in 2012

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Japfa Comfeed Merger with Multibreeder Adirama

  1. 1. Japfa Comfeed Merger
  2. 2. Multibreeder Adirama  Chicken breeder  73.39% owned by Japfa
  3. 3. PT Japfa Comfeed Indonesia Tbk  Poultry division (Poultry feed, DOC breeding, Commercial Farming)  Aquaculture division, which covers fish and shrimp feed production, shrimp hatchery and shrimp farming,  Beef Cattle Division  Two supporting Business units (Copra processing and plastic woven bag)
  4. 4. Purpose of Merger  The merger is expected to lead to gains from integration of operations, financing, administration, and compliance so that the company can perform the development of DOC [day-old chicks] facilities for production  The increase in DOC production would boost demand for feed for chicken breeders and broilers and would also influence the growth of Indonesia’s animal feed industry.  The merger was also expected to create cost efficiencies equal to 3 percent of the company’s total operational expenses,
  5. 5. Transaction Details  Japfa's fair market price is agreed at IDR 4325, while MBAI at IDR 13,164 per share.  After the transaction completed Multibreeder will: 1. Delisted 2. Liquadated
  6. 6. Transaction Details  Japfa would issue 60.37 million in new shares in return for the 26.61 % Multibreeder stake currently held by the public.  Two Options for Multibreeder public shareholders 1. To swap 1 share of Multibreeder with 3.025 shares of Japfa, or 2. Sell their shares to Japfa at predetermined price of Rp 13.164/per share  The exchange will give a liquidity benefit to Multibreeder’s public shareholders
  7. 7. Company Structure
  8. 8. Post merger  Through this merger, JPFA will receive borrowing rates of 7-9% – lower than the previous rates of 10-10.5% that MBAI received on its own.  With a lower cost of funding, the DOC division expanded its production to 500m DOCs in 2012. Greater commercial farm production will follow from higher DOC production.  Moving ahead, JPFA aims to grow organically by adding 3m tones to its poultry feed capacity through expansions in Makassar, Lampung, Padang and Banjarmasin, as well as by adding two more feed mills in East and West Java that will support a 2013 top line of Rp20.5trn ($2.05bn), up 13% year-on-year.

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