TPG Capital to acquire poultry processor Inghams

US private equity firm TPG Capital has agreed to acquire Australia’s leading poultry processor Inghams Enterprises in a deal estimated to be worth approximately A$880m ($901m).

In a hard-fought bid that went through several rounds, TPG Capital beat several other bidders in the auction, including private equity firm Blackstone as well as a consortium led by Chinese agribusiness company New Hope.

TPG Capital, which was advised by Macquarie Capital, has lined up commitments of A$775m ($792.9m) from seven banks to fund the deal, according to sources familiar with the matter.

On completion of the deal, Inghams will retain its existing management structure, and will continue to operate the business as usual under the direction of chief executive officer Kevin McBain and his team.

Australian food firms have been attracting interest from private equity firms and other Asian buyers over the past two years due to good cashflows and sales, which have overcome a slowing economy.

In July 2012, Inghams’ only shareholder Bob Ingham put the business up for sale and appointed Investec Bank to assess the divestment.

The company operates ten poultry plants, nine processing facilities, 11 feed mills and a pig farm, and employs 8,000 people. It posted revenues of A$2.2bn ($2.25bn) in 2012.

Inghams, founded in 1918, produces chicken and poultry products under the Ingham Chicken brand and operates across Australia and New Zealand. Its main customers include Coles and Woolworths.

The company’s expected earnings before interest, tax, depreciation, and amortisation (EBITDA) for 2013 are nearly A$200m ($204.25m).