MHP acquires 91% of EU-based poultry producer

Ukraine’s leading poultry producer MHP (MHPC LI, MHPSA)
signed an agreement for the acquisition of 90.68% of the shares of Perutnina
Ptuj, a poultry meat producer and processor in Southeast Europe headquartered
in Slovenia, according to the company’s Nov. 20 announcement. MHP did not
announce the deal’s value, only repeating its intention to invest around EUR
200 mln in the company’s development in 4-5 years.

Andriy Perederey: Perutnina
Ptuj generated EUR 27.4 mln in LTM EBITDA in as of end-June 2018 (or 7% of
MHP’s EBITDA for the same period), while its net debt was EUR 35.3 mln at the
end-June, according to the report of the SIJ Group. Based on these financials,
we estimate the deal’s value could be in the range of USD 100-120 mln. In other
words, the deal is most likely value-neutral for MHP in the short term.
Regardless of the deal, we remain bullish on MHP stock and neutral on its
Eurobonds.