Top private equity firms are to bid for Australia's largest poultry producer, Inghams, sources with direct knowledge have suggested.
Blackstone Group and Hong-Kong based Affinity Equity Partners have expressed interest in the privately held Ingham Chicken, with annual sales of $2.1 billion,. The source said the business could fetch six or seven times Ingham's fiscal 2013 earnings, or up to $1.4 billion.
Inghams Enterprises, which owns the Ingham Chicken brand, has attracted "very good interest" from global buyout firms and international trade buyers and added indicative bids were due soon, other sources have reported.
Australian food manufacturers have been highly sought after by private equity and other Asian buyers in the past two years due to resilient sales and solid cashflows, which have withstood a slowing economy.
Hong-Kong based Affinity Equity Partners last year bought chicken firm Tegel Foods in New Zealand from private equity firm Pacific Equity Partners (PEP) for $460 million.
Bob Ingham, the sole shareholder of Inghams Enterprises, said in July he had decided to sell the business after long consideration. He turned 81 this year and inherited the business in 1953 from his father.
Inghams Enterprises has forecast 2013 earnings before interest, tax, depreciation, and amortisation of about $200 million. Its major customers are Australia's top two supermarkets, Woolworths and Coles. The company was founded in 1918 and employs 9,000 people across Australia and New Zealand.
Source: Argentine Beef Packers S.A.
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