Blackstone, New Hope in race to acquire poultry processor Inghams

US private equity firm Blackstone Group and Chinese agribusiness company New Hope Group have entered into the final round of bidding for Australia’s leading poultry processor Inghams Enterprises, a deal expected to be worth A$1.4bn ($1.5bn).

The second round of bids will be launched by December, reported Reuters citing sources with knowledge of the matter.

Although the auction attracted several private equity firms such as Bain Capital, KKR & Co, and Hong-Kong based Affinity Equity Partners, they did not launch preliminary bids.

Thai food manufacturer CP Foods made a preliminary bid, but later withdrew from the auction.

According to sources, Blackstone, a US-based alternative asset manager, is being advised by UK bank Barclays over the deal.

New Hope is a leading supplier of meat, egg and dairy products in China, with annual revenues of $8.8bn.

The company operates more than ten animal feed plants and poultry farms, and has forayed into the Philippines, Bangladesh, Indonesia and Vietnam.

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, Ingham’s only shareholder Bob Ingham put the business up for sale and appointed Investec Bank to handle the divestment.

Inghams, which owns the Ingham Chicken brand, produces chicken and poultry products and operates across Australia and New Zealand, and its main customers include Coles and Woolworths.

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