Sigma Alimentos launches takeover offer for Spain’s Campofrio

Sigma Alimentos, a Mexican frozen food company, has launched a cash tender offer to acquire Spain-based processed meats firm Campofrio.

Campofrio is one of the major European processed meats companies, with popular brands and a network of 25 manufacturing facilities in eight countries, including Spain, France, Italy, Germany and the US.

In the recent 12-month period ended 30 September 2013, it reported sales and normalised EBITDA of €1.9bn and €147m, respectively.

The Mexican firm has agreed to pay €6.8 per share equivalent to €675m equity value or €1.12bn, including debt.

The offer is subject to the receipt of approval from the Comision Nacional del Mercado de Valores (CNMV) of Spain.

Sigma plans to back the proposed acquisition through a fully committed five-year term loan.

The company stated that it has already inked purchase agreements with certain Campofrio shareholders, which represent 45.8% of the latter’s equity.

In addition, Campofrio founding family member Pedro Ballve will receive financing from Sigma to buy back his stake, following the completion of the deal.

Alfa president Alvaro Fernandez said, "The acquisition of Campofrio is consistent with Sigma’s long-term growth strategy and gives it the opportunity to expand its current market coverage in the Americas, to become a global leading refrigerated foods player."

Sigma CEO Mario Páez said, "By leveraging on Campofrio’s top management, strong brands and European footprint, we can drive further value by accelerating the implementation of the company’s announced strategic plan; achieving economies of scale; implementing best practices across both organisations; introducing both companies’ products across each other’s geographies and capitalising on the expected improvement in the macroeconomic environment in Europe in the medium term."

Earlier this year Sigma’s parent company, conglomerate Alfa, said that it was seeking to launch an initial public offering (IPO) for the food unit.

Sigma is engaged in processed meat operations in North America and in cheeses in Mexico with 41 plants and 132 distribution centres that cater to 440,000 points of sale in North, Central and South America and the Caribbean.