Quebec’s Aliments Breton Foods, North America’s top producer of organic and “natural” pork, is poised to sell off its international hog genetics business to a major British genetics and biotech player.
Breton announced Monday it will sell its Genetiporc arm’s Canadian, U.S. and Mexican assets to animal genetics firm Genus for $30.99 million, and Genetiporc’s Brazilian assets separately to a Genus joint venture with Brazil’s Agroceres for $8.67 million.
Genus said it will buy Genetiporc’s U.S. and Mexican companies and “certain assets” in Canada — mainly “intellectual property, genetic nucleus herds of approximately 3,200 pure line sows and customer contracts” — and merge them into Genus’ global hog business, PIC.
Under that deal, Breton would become a customer of PIC as part of a long-term agreement to buy exclusively PIC’s genetics. Genus would also take on about $5.77 million of Genetiporc debt.
That part of Genus’ deal with Breton is subject to “satisfactory completion of veterinary verification,” among other conditions, and is expected to close sometime next month.
Meanwhile, the Genus/Agroceres joint venture, Agroceres PIC, will buy the Brazilian business, Genetiporc do Brazil. Genus, which owns 49 per cent of Agroceres PIC, would pay 49 per cent of the bill.
“The acquisition of Genetiporc represents a further important step in the strategic growth and development of Genus as we focus on providing the very best genetics to meet the demands of a rapidly growing and urbanized global population,” Genus CEO Karim Bitar said Monday in a release.
Genetiporc, based at Saint-Bernard, about 45 km south of Quebec City, “is an excellent fit with Genus’ existing business in the Americas, further strengthening our market position in that geography, and also provides our customers around the world with a wider and deeper genetic pool,” Bitar said.
Genetiporc CEO Christian Breton, meanwhile, said the deal “provides our customers and supply chain partners with the long term opportunity to further grow and derive value from the partnership with the new Genus-Genetiporc business.”
Genus and Genetiporc’s genetic nucleus herds and product development programs will be “integrated,” Genus said, and Genetiporc’s operations will be merged into PIC’s North American and Latin American businesses by “integrating the supply chains and merging customer-facing teams.”
The broader resulting supply chain and multiplier base “supports future growth for PIC’s North American and Latin American business and improves the ability of PIC to serve our current and future customers,” Genus said, and Genetiporc customers will get access to PIC’s “market-leading technical and health services.”
Genetiporc’s businesses outside Brazil booked $61.81 million in revenues and broke even in the year ending June 30, while Genetiporc do Brazil took in $8.89 million in revenues and about $702,000 in profit during the same period.
At full run rate, Genus expects “synergies” of about $11.37 million per year — including its share of synergies in Brazil — as Genetiporc’s operations are merged into PIC’s. The deal is expected to be “modestly accretive” to Genus in fiscal 2014.
Genetiporc, in business since 1984, today has over 300 customers and estimated volumes of over 13 million market pig equivalents, compared with Genus’ 99 million market pig equivalents in the same period, Genus noted. — AGCanada.com Network