Thursday, October 16, 2014

InVivo closes the acquisition of Total mining and signals that will make more acquisitions in the country

Global Chief Executive in the area of nutrition and animal health of the French group InVivo, Hubert de Roquefeuil had just shut down a business meeting in Itaim Bibi, São Paulo, and could barely contain their enthusiasm. "A few minutes ago, the Brazil became the most important country for us," stated the value on Tuesday, shortly after the acquisition of Total mining consecrate foods-the second largest in the history of InVivo group worldwide.
The enthusiasm was such that Roquefeuil until you forgot one "detail". "I always forget of France, our motherland," he continued, rectifying the opening line. In fact, the Total Food purchase made Brazil surpass the Mexico and become the second most important in the area of nutrition and animal health of InVivo, which grossed $ 1.9 billion in 2013/14 ano-fiscal, which ended in June. In all, the French group, which also operates as agricultural trading and has a network of resellers in France, grossed $ 8.2 billion.
Controlled by a group of more than 200 French agricultural cooperatives, the InVivo, which was better known as Evialis until last year, has intensified its activities in Brazil from 2007, with the acquisition of Zoofort Mato Grosso. From there to here, came three more major purchases, including the acquisition of the assets of Cargill animal nutrition controlled in Brazil. With the Total, InVivo resumes aggressive acquisition strategy and already sees new business.
According to Roquefeuil, the Total amount of revenue in Brazil for InVivo r $ 1.2 billion, compared to the approximately $ 700 million of last ano-fiscal. The Executive would not disclose the value of the acquisition, but an industry source said the value that, whereas the multiple usual animal nutrition segment-of 7 to 10 times Ebitda, the InVivo must have paid between $ 300 million and $ 400 million to acquire the Total Food.
Headquartered in the municipality of Três Corações (MG), the Total is one of the largest producers of animal feed company in the country, such as dogs and cats. In addition, the company also produces feed for dairy cattle. According to the President of InVivo in Brazil, Nilton Perez, the Total has a production capacity of more than 400 thousand tonnes of feed per year. With that, the InVivo will have a capacity of 1.5 million tons.
From the global point of view, Roquefeuil asserts that the Total acquisition is the first of many others that must occur in the animal nutrition sector later this year. Currently, he says, the InVivo is negotiating the purchase of five other companies in Indonesia, France and South America. "We are very close to signing in Indonesia and conversations are halfway in France", reveals the Executive. The Brazil also will stage new business, ensures. "We are starting the conversations," he says.
To finance these acquisitions, InVivo will feature capabilities of a capital increase of nutrition and animal health Division and will also incur debt. Second Roquefeuil, the company intends to raise € 400 million on the two measures. In the case of the capital increase, which should be between € 200 million and € 250 million, InVivo will magnify the participation of banks and funds in the capital of the Division for 40%-today, this slice is of 25%. The expectation of the Executive is completed the capital increase in January 2015.
In Brazil, the challenge of expanding the InVivo also is an attempt to reduce the dependence on sales of products for cattle and milk, which represents more than 40% of the company's revenue. Although the Total also produce feedingstuffs for dairy cattle, the acquisition of the company already contemplates the strategy, says Perez, President of InVivo in the country. According to him, the Total acquisition raises the participation of companion animals in the company's revenue from 2% to 20%. "In Brazil, we are trying to find the balance of our business," he explains.
Given this, Perez admits that buying companies in the area of ruminants is not the priority. The Executive does not reveal details, but one of the bets of InVivo in Brazil is the aquaculture sector with the production of Tilapia and shrimp feed. Today, this segment accounts for 25% of revenue in the country.
In addition to the acquisitions, InVivo continues with its strategy, announced last year, to invest $ 100 million until 2016 in organic growth. The company has already invested a third of this total.
Valor Economico
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