The family-owned Irish company had net revenues of €164m and EBITDA of €13m last year. The settlement will be a combination of six million Scandi Standard shares, an earn-out mechanism, cash and the assumption of outstanding interest-bearing debt.
Scandi Standard said that the Irish poultry processing market was similar to that of the Nordic countries. Both regions face a demand for domestic supply, with both consumer markets similar in size, population and gross domestic product.
“I am enthusiastic about the deal as Manor Farm satisfies all our acquisition criteria,” said Leif Bergvall Hansen, CEO of Scandi Standard. “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.”
Manor Farm has approximately 130 farmers contracted as growers and 43 contracted as breeders. It also owns and operates a feed mill.
The Irish firm is run by brothers Vincent and Justin Carton, who are the eighth generation of the family in the business. They currently own 85% of the financial interest in Manor Farm and intend to stay on as Scandi Standard shareholders.
“In considering a succession of ownership for our family business, my brother Justin and I have been determined to find a partner that can continue to build on our strong relationships with customers, employees, suppliers and the broader communities in which we operate,” said Vincent Carton.
“As the next generation of Cartons have chosen to pursue other business interests, we set out to find a partner with high standards, a culture similar to our own and the capability to develop the business to its fullest potential. We believe that Scandi Standard is the ideal partner, and we are delighted to have agreed a transaction structure that allows the current management to remain fully in place and that also allows the Carton family to become shareholders in Scandi Standard.
“We believe that this arrangement will serve our customers, employees and suppliers well, and we look forward very much to the next chapter in the history of Manor Farm.”