2008-01-17

Investors sought to acccelerate growth

Investors Sought to Accelerate Growth
 
The sale of one of Australia's leading poultry producers, Bartter-Steggles, has attracted interest from private equity firms and trade players from across the sector. The company is seeking investors to acquire or invest in the business to help fund the growth, development and modernization of the business.
 
The Australian poultry industry has generated revenues of approximately $2.7 billion and is expected to grow at 2.8% per annum. Higher growth of 5.0-6.5% is expected from value added products driven by a trend towards healthier eating, pre-prepared meals and product innovation.
 
Over the past 4 years Bartter-Steggles, which has a market share of 26%, has delivered a strategy to capitalize on these trends through new product development. Its product pipeline is strong with another 20 products set for release over the next 18 months.
 
Bartter-Steggles has invested heavily in business improvement during the last 18 months which delivered $24 million in annualised cost savings for the year to June 2007. The company expects another $12.9 million in cost to come out the business this financial year. These cost initiatives coupled with its success in passing on rising feed costs has the company on track for a strong year.
 
Bartter-Steggles customers include: Coles, Woolworths, Metcash, Franklins, Foodworks, Lenards, MacDonalds, KFC, Red Rooster, Oporto and Nandos.
 
Considering the poultry industry remains relatively fragmented with significant potential to rationalise the sector offering a buyer significant upside, it is little wonder private equity is eyeing the Aussie icon.     
 
The Information Memorandum will be released by the end of January, with indicative offers by the end of February and final offers due by the end of March.