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Grupo LALA Closes Acquisition of Brazilian Dairy Firm Vigor Alimentos.

M2 EQUITYBITES-October 27, 2017-Grupo LALA Closes Acquisition of Brazilian Dairy Firm Vigor Alimentos


27 October 2017 - Mexican dairy producer Grupo Lala, S.A.B. de C.V. has closed the acquisition of the Brazilian dairy company Vigor Alimentos S.A., including its shareholding in Itamb? Alimentos, S.A., for an implied value of BRL 5.025bn (USD 1.53bn), the group said.

Following a relevant event published on 21 September, the Cooperativa Central dos Produtores Rurais de Minas Gerais Ltda is expected to exercise its right of first refusal to acquire 50% of the remaining Itamb? shares, belonging to Vigor, so the net implied value of the Transaction would be BRL 4.325bn (USD 1.31bn).

The transaction was financed with a bridge loan for USD 25,229 m pesos with the banks JP Morgan, BBVA Bancomer and Santander; the refinancing of the bridge loan will be through long-term debt and possible bond issue.

Founded in 1917, Vigor is a company in the Brazilian dairy market focused on value added products and innovation.

It has more than 7,600 employees, 11 milk collection centers, 14 production plants, 31 distribution centers and 67,000 points of sale in Brazil.

In addition, it has a wide portfolio of dairy products, including yogurt, cheese and other dairy products, marketed under the Vigor, Danubio, Faixa Azul, Serrabella Leco and Amelia brands, among others.

Itamb? Alimentos S.A. is a Brazilian dairy company with more than 66 years of experience in the market. It has a complete portfolio of dairy products, mainly: powdered milk, condensed milk, milk caramel, yogurt, dairy products and UHT milk, under the Itamb? brand.

This transaction is subject to certain common conditions, including the approval of Grupo Lala's board of directors and shareholders meeting (for which a corporate restructuring statement will be disclosed), governmental authorisations, shareholder agreements and other inherent contractual conditions.

LALA will obtain financing and possible additional capitalizations as part of the financial package for these acquisitions. LALA will timely inform whether the transaction is completed.

In case this acquisition is approved by the board of directors of LALA, a conference call with investors has been convened for 4 August 2017.

Grupo LALA is a Mexican company focused on the production, innovation and marketing of milk and dairy products.

The company operates 22 production plants and 160 distribution centers in Mexico, United States and Central America, supported by more than 34,000 employees.

Grupo LALA's fleet of approximately 7,000 vehicles distributes its more than 600 products to nearly 500,000 points of sale. LALA's portfolio is led by its two main brands: LALA and Nutri Leche.

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Publication:M2 EquityBites (EQB)
Date:Oct 27, 2017
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