Herdez to Buy Majority Grupo Nutrisa Stake for $159 MillionJonathan J. Levin
Grupo Herdez SAB, Mexico’s biggest producer of canned foods, agreed to pay 2 billion pesos ($159 million) for a 67 percent stake in Grupo Nutrisa SAB to expand into frozen yogurt.
The Mexico City-based company will buy the stake in Nutrisa, which sells its yogurt in specialty stores and mall food courts, for 91 pesos per share, a 12 percent premium to yesterday’s closing price, according to a filing today. The offer values the transaction at 2 billion pesos, investor relations official Andrea Amozurrutia said in a phone interview.
Herdez fell 2 percent to 39.99 pesos in Mexico City at the close of trading. Nutrisa, also based in Mexico City, rose 4.3 percent to 84.50 pesos.
Consumer-driven businesses have been expanding in Mexico, Latin America’s second-biggest economy. Third-quarter revenue at Herdez jumped 22 percent from a year earlier. In December, fast-food restaurant operator Alsea SAB said it agreed to acquire exclusive operating control of the Burger King brand in the country to take advantage of a growing consumer base.
Herdez intends to add further to its stake in Nutrisa, with a goal of owning all the shares, according to the filing to the nation’s stock exchange. The deal is subject to regulatory approval, the company said.
Nutrisa’s sales of 1.12 billion pesos in the 12 months through September equaled 10 percent of Herdez’s revenue. Nutrisa’s earnings before interest, taxes, depreciation and amortization were about 9 percent of Herdez’s, according to the bourse filing.
“This is a totally new category for us,” Herdez’s Amozurrutia said today by phone. “This is a growth opportunity for Grupo Herdez to participate in a new category and a new channel” of distribution.
Herdez evaluated a “list of targets” before making the offer to Nutrisa, she said. Herdez carried out the transaction directly with the target without working with investment bankers, according to Amozurrutia.
Grupo Financiero Ve Por Mas SA said the purchase will have an “immediate” impact on the Herdez’s performance as it uses its distribution channels to introduce Nutrisa products to new customers.
“The acquisition of Nutrisa will drive Herdez’s growth strategy,” Ve Por Mas analyst Jose Maria Flores Barrera wrote in an e-mailed report today.