Acquisition of Pilgrim’s Pride and Association with Bertin S.A.

2,409 views

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
2,409
On SlideShare
0
From Embeds
0
Number of Embeds
131
Actions
Shares
0
Downloads
43
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Acquisition of Pilgrim’s Pride and Association with Bertin S.A.

  1. 1. JBS S.A. announces the acquisition of Pilgrim's Pride Corp. and association with Bertin S.A. Creation of the Largest Multi-Protein Company in the World Transactions subject to customary conditions for this type of business September 16, 2009 “In God we trust, Nature we respect” 0
  2. 2. Disclaimer The forward-looking statements presented herein are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of our management, and on information currently available to us. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur. Our future operating results, financial condition, strategies, market share and values may differ materially from those expressed in or suggested by these forward-looking statements. Many of the factors that will determine these results and values are beyond our ability to control or predict. Forward-looking statements also include information concerning our possible or assumed future operating results, as well as statements preceded by, followed by, or including the words ''believes,'' ''may,'' ''will,'' ''continues,'' ''expects,'‘ ''anticipates,'' ''intends,'' ''plans,'' ''estimates'' or similar expressions. 1
  3. 3. Presenters Joesley Mendonça Batista CEO Fernando Antônio Bertin CEO Jeremiah O’Callaghan Investor Relations Officer 2
  4. 4. Creation of the largest protein company in the world  Leader in beef processing in Brazil,  Total revenues of approx. US$30 Australia, Argentina and Italy and one billion of the leaders in the US  Global processing capacity:  Third largest pork processor in the US - Beef: 90.4 thousand heads/day  Leading company in the poultry - Pork: 48.5 thousand heads/day industry in the US and in the world - Poultry: 7.2 million birds/day  Global leader in leather tanning - Smalls: 19.5 thousand heads/day - Leather: 148,500 m2/day - Dairy: 1,266 tons/day Complementary companies Source: Companies’ estimates 3
  5. 5. Transaction summary Pilgrim’s Pride acquisition Pilgrim’s Pride acquisition Association with Bertin S.A. Association with Bertin S.A.  Firm value of US$2.8 billion  Bertin and JBS controlling shareholders will contribute to a new Holding company their  Initial acquisition by JBS S.A., through its stakes of 73% and 51%, respectively JBS USA subsidiary, of new issued shares representing 64% of Pilgrim’s Pride total  It is estimated that the respective equity capital value of Bertin and JBS should be in a proportion of approximately 40%-60%  Estimated synergies of US$200 million/year  Estimated synergies of R$ 500 million/year  Customary precedent conditions, including: - Approval by the competent antitrust  Customary precedent conditions, including: authority - Approval by the competent antitrust - Final approval of the Reorganization authority Plan in the Bankruptcy Court (Chapter - Due Diligence 11 of the United States Bankruptcy Code) JBS is in an advanced negotiation for a capital increase of US$2.5 billion in JBS USA, resulting in a maximum stake of 26.3% after the capitalization 4
  6. 6. Ownership structure post transactions Ownership structures before transactions Ownership structure post transactions Market Batista including Family BNDES Batista Bertin 51.4% 48.6% Family Family JBS S.A. Controlling Market including Holding BNDES Bertin ~60% * ~40% * BNDESPAR Family 73.1% 26.9% JBS S.A. Investor Bertin 100% ≥73.7% Other JBS U.S.A. Bertin subsidiaries Includes AUS ≤26.3% Pilgrim’s Float 64% Old shareholders shareholders 35% 65% 36% Pilgrim’s Pilgrim’s Pride Pride * Controlling shareholders’ estimates 5
  7. 7. Agenda Pilgrim’s Pride Corp. acquisition Association between Bertin S.A. and JBS S.A. Creation of the Largest Multi-Protein Company in the World Questions and answers 6
  8. 8. Strategic Rationale of Pilgrim’s Pride Acquisition  Opportunity to enter in the poultry industry as one of the largest companies in the world (Net revenues of US$8.5bn in FY 2008)  Integrated distribution of Pilgrim’s Pride is aligned with JBS direct distribution strategy  Potentially higher margins  Traditional brands  US$200m/year of potential synergies  Capacity of adding value through turnaround process by the implementation of better operating and managerial practices  JBS USA exports growth 7
  9. 9. Pilgrim’s Pride overview Profile Profile Recent Events Recent Events  One of the largest producers of chicken with  Dec. 2006: Acquisition of Gold Kist for US$ 1.1 bn extremely well-known brands in this industry  May 2008: Public Primary Offering of 7.5 million  Plants in the US, Mexico and Porto Rico shares at US$24/share (total of US$180m), aiming  Vertically integrated company to reduce leverage  Chicken production in 2008:  Nov. 2008: Rating downgraded by S&P – 3.8 million tons  Dec. 2008: Company files for Chapter 11  Slaughterhouses: (Bankruptcy protection) – 33 in the US, 3 in Mexico and 1 in Puerto Rico - Company was delisted from NYSE and started  Employees: ~ 41 thousand to be traded over-the-counter  Distribution centers:  Feb. 2009: Shares reach their lowest historical – 6 in the US, 18 in Mexico and 1 in Puerto Rico price of US$0.15/share Net revenues (US$ million) Net revenues (US$ million) EBITDA (US$ million) and margin (%) EBITDA (US$ million) and margin (%) 5.5% 2.8% 3.2% 8,525 7,499 7,095* 414 143 225 * 5,153 -9.6% -821 FY06 FY07 FY08 FY09E FY06 FY07 FY08 FY09E Source: 10K, 10Q and Pilgrim’s Pride Plan of Reorganization Pilgrim’s Pride fiscal year is from October to September * Does not include Mexico operations 8 8
  10. 10. Footprint expansion in North America Pilgrim’s Pride Acquisition will strengthen JBS’ presence in North America Pilgrim’s Pride Acquisition will strengthen JBS’ presence in North America WA MT ND MN ME SD WI VT OR ID WY MI NH NY IA MA NE D CTRI D D OH PA NV IL IN NJ UT D CO M D KS MO WV D DE CA KY VA TN OK NC AR AZ NM D D MS D D SC AL GA D TX LA D D D FL D D MEXICO D D DD D D Subtitle D D D D D D D JBS USA production units DD D D JBS USA distribution center D Pilgrim’s Pride production units 9 D Pilgrim’s Pride distribution center
  11. 11. Agenda Pilgrim’s Pride Corp. acquisition Association between Bertin S.A. and JBS S.A. Creation of the Largest Multi-Protein Company in the World Questions and answers 10
  12. 12. Strategic rationale for the Bertin association  Diversification into new segments with significant presence in the dairy industry  Creation of the largest leather processing company  Potential gains of scale, with estimated synergies of R$ 500 million / year  Expansion of distribution channels (Retail and Food Service)  Optimization of the industrial assets due to its geographic complementarity 11
  13. 13. Bertin has presented a track record of success and growth since its beginning in 1977 Bertin’s track record Bertin’s track record Beginning of activities Internationalization: 100% of VIGOR Construction Slaughterhouse Quality Meat (Paraguay) Processed Bresaola Acquisition Rigamonti (Italy) Slaughterhouse Canelones Implementation (Uruguay) Tannery Trump (China) Gross Sales (R$ million)1 Bertin Modernization 7,544 Slaughter of 20 head/day Tannery Distribution Center (Lins/SP) (Redenção/PA) (Rio de Janeiro/RJ) Processed beef plant Tin plant 5,935 Tannery (Lins/SP) (Lins/SP) Tannery (S. Luis M. Belo/GO) (Lins/SP) Tannery Pet products plant (Rio Brilhante/MS) Processed beef (Guaiçara/SP) Fresh beef exports exports to Europe 3,742 to Europe Tannery Terminal of Conteiners (Naviraí/MS) 2,918 3,117 Modernization 2,164 Tannery Tin plant Slaughterhouse 1,732 (Lins/SP) (Lins/SP) 1,473 (Naviraí/MS) 1,166 879 1977 1984 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Slaughterhouse Slaughterhouse Hygiene & Beef Shopping Beef Jerky plant (Marabá/PA) (Campo Grande/MS) Slaughterhouse Cleaning (Ituiutaba/MG) (Alphaville/SP) (Lins/SP) Pouch plant Slaughterhouse (Lins/SP) (Lins/SP) Água Boa/MT, Redenção, Beef Shopping Tannery Santana do Araguaia (Lins/SP) (Cacoal/RO) and Tucumã/PA) Tannery (Aguaí/SP) Modernization Slaughterhouse Distribution Centers Controlling stake Tannery (Mozarlândia/GO) Brasília/DF, of VIGOR (Estância Velha/RS) Belo Horizonte/MG Pet Products plant Establishment of (S. Luis M. Belo/GO) and Curitiba/PR BERTIN S.A. Slaughterhouse Slaughterhouse Beef Shopping (Itapetinga/BA) (Diamantino/MT) (Ribeirão Preto/SP) Source: Bertin 1 2007 consolidated results include Vigor sales, acquired in November of that year, as if the transaction had occurred in January’ 2007 12
  14. 14. Bertin Overview Description Description Net Sales Breakdown (R$ million) Net Sales Breakdown (R$ million) Established in 1977, Bertin has 38 2008 production units and 28 thousand employees 7% - Present in the beef, dairy, leather and pet 12% product segments with several nationwide well-known brands, e.g. Bertin, Vigor, Leco and Danúbio 13% - Units in Brazil, Uruguay, Paraguay and China 68% - Exports to more than 110 countries Production Capacity: - 16,450 head/day (2009E) Beef Leather Dairy Others - 21,400 hides/day (2009E) Net Sales (R$ million) Net Sales (R$ million) EBITDA (R$ million) and margin (%) EBITDA (R$ million) and margin (%) 13.2% 7,224 10.5% 10.7% 6,626 5,188 687 694 776 2007 2008 LTM 2007 2008 LTM Jun09 Jun09 Source: Bertin 13
  15. 15. South America production base The combined production units places JBS at the forefront in South America The combined production units places JBS at the forefront in South America PA AC RO MT BA GO MG Brazil Paraguay MS RJ PR SP SC SF CO ER Uruguay BA Argentina Combined companies 14
  16. 16. Agenda Pilgrim’s Pride Corp. acquisition Association between Bertin S.A. and JBS S.A. Creation of the Largest Multi-Protein Company in the World Questions and answers 15
  17. 17. Creation of the largest protein company in the world Combined company will have a leading position in the global market Combined company will have a leading position in the global market Global ranking of protein companies (US$ million)1 largest global protein 1a company 28,725 28,130 12,717 12,488 12,088 10,494 9,457 6,755 Source: Companies, Exame, Valor Econômico and CNN (Global 500) 1 Based in net revenues of 2008 and including Pilgrim’s Pride in Bertin + JBS 16
  18. 18. Expansion of global leadership and geographic diversification Presence in over 23 countries across five continents Presence in over 23 countries across five continents Slaughterhouses and Industry Beef Distribution Centers / Commercial Offices Distribution centers X Processed products Leather Pork Dairy Ovine Vegetable fat Leather Pet products Poultry Source: Companies 17
  19. 19. Leader company in the protein industry Ranking Ranking Presence Presence Installed capacity Installed capacity Industrial units Industrial units  Brazil / Argentina  Brazil: 43,400 heads/day  Brazil: 39 / Italy / Australia /  Latin America: 6,700 heads /day  Latin America: 8 U.S.A. / Uruguay /  U.S.A.: 28,600 heads/day  U.S.A.: 13 Beef Beef 1 Paraguay  Italy: 3,000 heads/day  Italy: 8  Australia: 8,690 heads/day  Australia: 10  Total: 89,790 heads/day Total: 82  U.S.A. / Mexico  U.S.A. / Mexico:  U.S.A.: 34 Poultry 7.2mm birds/day  Mexico: 3 Poultry 2  Total: 7.2mm birds/day Total: 37  U.S.A.  U.S.A.: 48,500 heads/day  U.S.A.: 3 Pork Pork 3  Brazil / U.S.A. /  Brazil: 148,500 m2/day  Brazil: 12 Leather Leather 1 China  Brazil  Brazil: 1,266 ton/day  Brazil: 7 Dairy Dairy 3 18
  20. 20. Combined Financials JBS S.A Pilgrim's Pride Bertin S.A. Combined logo logo logo R$ million Jun 2009 FY09E (2) Jun 2009 TOTAL Results Net Sales LTM 38,680 (1) 14,778 (3) 7,224 60,683 Ebitda LTM 1,482 (1) 469 (3) 776 2,727 Ebitda Margin 3.8% 3.2% 10.7% 4.5% Gross Indebtedness 6,226 4,914 4,628 15,768 Cash and cash equivalents 2,299 496 702 3,496 Net Debt 3,928 4,418 3,926 12,272 Net Debt / Ebitda (4) 2.6 9.4 5.1 4.5 Net Debt Pro Forma / Ebitda (5) -0.6 9.4 5.1 2.7 Source: Companies (1) Pro forma figures (2) Fiscal year from October to September (3) Does not include Mexican operation (4) Does not include capital increase (5) Considering US$2.5 billion capital increase in JBS USA 19
  21. 21. Final remarks  Complementary activities and consolidation of the global leadership in the protein industry will be strengthened through the association between JBS S.A. and Bertin S.A.  Entry in the poultry industry through one of the leading companies in the US industry  Acceleration of direct distribution strategy through the IPO of JBS USA  Appropriate capital structure  Significant opportunity of adding value through synergy gains  Proven track record in acquisitions, integration and restructuring of companies  Resuming growth through acquisitions and partnerships 20
  22. 22. Questions and Answers Creation of the Largest Multi-Protein Company in the World September 16, 2009 “In God we trust, Nature we respect” 21

×