FDBusiness.com

Sweden-based Scandi Standard, the leading chicken producer in the Nordic region, has agreed to acquire Manor Farm, the largest chicken processor and market leader in the Republic of Ireland, in a deal worth €94 million. Payment will be partly in the form of Scandi Standard shares. There is also an earn-out mechanism. Completion of the transaction will require approval at an Extraordinary General Meeting of Scandi Standard later in the summer.

Manor Farm is one of Ireland’s oldest family businesses, dating back to 1775. The company sources and processes approximately 50% of all fresh chicken sold in the Irish retail market and approximately 25% of all chicken consumed in Ireland. The business focuses on fresh products for the retail market, selling to a diversified customer base. It operates a processing plant at Shercock in County Cavan. Manor Farm had net revenues of €164 million and EBITDA of €13 million in 2016.

Scandi Standard was created in June 2013, by gathering the largest poultry operations in the Nordic region into one collective group. At present, the group has an annual turnover of approximately SEK5.2 billion and almost 1,700 employees.

The dynamics of the Irish poultry processing market are very similar to those in the Nordic region. The market is well consolidated with three domestic players of scale. As in Scandi Standard’s existing markets, there is a strong preference for domestic produce in the retail channel, and the fresh segment is well developed. Importers distribute mainly to food service, butchers and industrial segments. The consumer market in Ireland is similar to the Nordic markets in terms of size, population and GDP.

Leif Bergvall Hansen, chief executive of Scandi Standard, comments: “I am enthusiastic about the deal as Manor Farm satisfies all of our acquisition criteria. The company has profitability in line with our existing operations, is well run and is the clear market leader in chicken in the Irish retail market. With its capable and experienced management team, the business can be run with a high degree of autonomy whilst additional steps, which have been identified, can be taken to capture the benefits of best practice. As many of our risks are country specific, the acquisition is also likely to reduce our earnings volatility through diversification.”

Vincent Carton.

Vincent Carton and Justin Carton, who own 85% of Manor Farm, are the eighth generation of the family in the business. Both will continue to run the company and will become shareholders in Scandi Standard.

Vincent Carton says: “In considering a succession of ownership for our family business, my brother Justin and I have been determined to find a partner who will build on our strong relationships with customers, employees, suppliers and the broader communities in which we operate. Scandi Standard is that partner, with an outstanding health and quality record in chicken processing. They’re also major chicken product innovators. They understand our business and our commitment to our people. We’re the best at what we do, and Scandi Standard is committed to continuing that.”