MHP pays EUR 221 mln for 91% stake in Slovenian poultry producer

Ukraine’s leading poultry producer MHP (MHPC LI, MHPSA)
has reached a final settlement price of 22.34 EUR per share in a deal to
acquire a 90.69% stake in Perutnina Ptuj, a poultry meat and a meat-processing
company based in Slovenia, according to the company’s Apr. 25 announcement. MHP
also confirmed it is currently in the final phase of the deal after completing
an audit of the company’s 2018 financials. A company spokesperson clarified
with Concorde Capital that payments will be finalized by the end of April.

Andriy Perederey: This
information implies that MHP will pay a total of EUR 221 mln (or about USD 246
mln) for the Perutnina stake. The deal’s EV is EUR 273 mln (USD 304 mln) and is
higher than our expectations of USD 100-120 mln.
We estimate the deal-implied multiple of EV to 2018 EBITDA is about 9.0x. This
is far higher than MHP’s market-based EV/EBITDA of 5.2x, meaning the deal does
not look value-creative for the company, at least in the short term. Therefore,
we expect some negative reaction of the market to such an announcement.