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Swift Goes Brazilian

A

Anonymous

Guest
5/29/2007 9:13:00 AM


Swift & J&F To Create the World’s Number-One Beef Processor

DALLAS & SAO PAULO, Brazil & GREELEY, Colo.--(BUSINESS WIRE)--HM Capital Partners LLC, a leading, Dallas-based private equity firm, J&F Participações S.A. ("J&F"), which owns 77 percent of Brazil’s JBS S.A. (Bovespa: JBSS3), Latin America’s largest beef processor, and Swift & Company ("Swift"), the world’s third-largest processor of fresh beef and pork products, today announced that HM Capital and J&F have signed a definitive agreement under which J&F will acquire Swift in an all-cash transaction representing an enterprise value of approximately $1.4 billion.

The transaction value includes $225 million in cash for all Swift stock held by HM Capital and Booth Creek Management Corporation, its investment partner in the September 2002 acquisition of Swift from ConAgra Foods, Inc., and the assumption by J&F of approximately $1.2 billion in Swift debt plus all transaction-related expenses.

Edward Herring, a Partner of HM Capital, said: "This is a win-win transaction for everyone involved. For HM Capital, the proceeds from this transaction, coupled with our earlier leveraged recapitalization of Swift, will together produce a very attractive return for our investors. For J&F, the strategic combination of Swift and JBS — industry leaders with no market overlap — will create the world’s leading beef processor. The transaction also will benefit Swift’s customers, employees and business partners, by creating a combined Swift-JBS enterprise in which Swift will retain its organizational identity, customer and supplier relationships and substantially all of its employees and leadership team while becoming part of the world’s largest beef processor."

Joesley Mendonça Batista, Partner of J&F and Chief Executive Officer of JBS S.A., said: "We are thrilled to acquire Swift & Company, and to be able to create a combined enterprise that will be the world’s leading processor of fresh beef and pork products. It is a major step for our group in establishing a global presence. More importantly, Swift will provide us with access to the Pacific region. Given the attractiveness of the asset, we are glad that we could reach an agreement with HM Capital. And finally, we would like to thank Swift’s management team for their stewardship of Swift during a very challenging time for the company and the entire beef industry. Thanks to them, to Swift’s thousands of valued customers, and to the 20,000 loyal and hard-working Swift employees worldwide, Swift today remains a great company with what we believe is significant earnings and growth potential."

Sam Rovit, President and Chief Executive Officer of Swift, said: "Nothing is more important to me and my colleagues on the Swift management team than seeing Swift remain the strong, stable, customer-focused company we are today. Joining J&F to become the world’s largest beef and pork processor, Swift should emerge even stronger, and that is good news for our partnership customers, our suppliers and our employees. I look forward to working closely with HM Capital and J&F to achieve a rapid completion of this transaction and a smooth, seamless transition to the new ownership structure."

HM Capital’s financial advisor with regard to the transaction was JP Morgan and its legal advisor was Vinson & Elkins, LLP. Rothschild acted as J&F’s exclusive financial advisor and Greenberg Traurig LLP and Velloza, Girotto & Lindenbojm as its legal advisors.

Completion of the transaction is subject to Hart-Scott-Rodino and other antitrust reviews and customary closing conditions, and is expected to occur in mid-July.

HM Capital, in partnership with Booth Creek Management Corporation, of Vail, Colorado, acquired Swift & Company — then known as ConAgra Meats Company — from ConAgra Foods, Inc. in September 2002. The original Swift & Company was founded in 1855.

About HM Capital Partners LLC

Based in Dallas, HM Capital is a private equity firm that leverages its sector expertise to acquire, change and build strategically relevant businesses. The firm is currently investing and managing more than $3.7 billion in equity capital.

About J&F Participações S.A.

J&F Participações is the controlling shareholder of JBS (Bovespa: JBSS3, market capitalization of $3.2 billion), the largest beef processor in Latin America and one of the largest exporters of beef in the world. JBS has operations in 23 plants in Brazil and 6 in Argentina. In 2006, JBS generated sales of nearly $1.8 billion and slaughtered more than 3.4 million head of cattle.

About Swift & Company

With nearly $10 billion in annual sales, Swift & Company is the third-largest processor of fresh beef and pork in the U.S. and the largest beef processor in Australia. Founded in 1855 and headquartered in Greeley, Colorado, Swift processes, prepares, packages, markets, and delivers fresh, further processed and value-added beef and pork products to customers in the United States and international markets. For additional information, please visit www.swiftbrands.com.
 

HAY MAKER

Well-known member
Leading Brazilian meatpacker purchasing Swift & Co.
Tuesday, May 29, 2007, 1:14 PM

by Julie Harker

A South American company reportedly has purchased Swift & Company of Greeley, Colorado, the world’s third largest processor of fresh beef and pork products. The Tribune newspaper in Greeley says Swift officials have confirmed the purchase agreement by JBS-SA of Brazil, Latin America’s largest beef processor. The one-point-four Billion dollar deal cost 225-Million dollars in cash and has the Latin firm of J&F and the private Dallas-based equity firm HM Capital assuming about one-point-two Billion dollars in Swift debt. The newspaper says Swift president and CEO Sam Rovit issued a statement saying the Swift team will remain in place. The deal will make the Brazilian company the largest meatpacker in the world.
 
A

Anonymous

Guest
Red Robin said:
Fooled me. I know that smithfield wanted them pretty bad. How will this play out? Will it make any difference?

Well when Tyson and Cactus Feeders announced their big merger/buyout with an Argentine Packing Plant- USDA couldn't move fast enough to start changing the rules on importing Argentine beef by changing their Foot and Mouth quarantine rules....

I predict it won't be long before the FMD rules will be changed for Brazil by USDA too- and Brazilian beef will be flooding across our borders- stamped with the USDA inspected stamp and passed off to unknowing US consumers/consumers of the world as a US product....
 
A

Anonymous

Guest
Red Robin said:
...and how will that affect our calf prices ?

With much of Brazils population living in poverty- working Ag jobs for less than $20 month ( minimum wage is $81 month- but not enforced)- and the average factory worker making between $160-270 month-- and an acreage that provides unlimited grass (cleared rain forests) and a climate that does not require supplemental feeding I would imagine that if they get access to the US markets to pass off Brazilian beef as US beef, they could probably have a pretty good impact on prices... :roll: :(

Unless we want to live on the type incomes they do, I think it would have to be considered a negative effect...
 

Red Robin

Well-known member
I'd agree and suggest the only qualifier I know which is if our cattle are worth more to the consumer (which isn't likely) or the packers.
 
A

Anonymous

Guest
Red Robin said:
I'd agree and suggest the only qualifier I know which is if our cattle are worth more to the consumer (which isn't likely) or the packers.

I think they would be worth more to the packer and consumer if country of origin of all meat was required to be provided to the consumer-- M-COOL-- and the US cattle industry would use its checkoff dollars to promote US born, raised, and slaughtered BEEF, instead of the generic beef of the world we currently promote for the Packers ....
 

Red Robin

Well-known member
Oldtimer said:
Red Robin said:
I'd agree and suggest the only qualifier I know which is if our cattle are worth more to the consumer (which isn't likely) or the packers.

I think they would be worth more to the packer and consumer if country of origin of all meat was required to be provided to the consumer-- M-COOL-- and the US cattle industry would use its checkoff dollars to promote US born, raised, and slaughtered BEEF, instead of the generic beef of the world we currently promote for the Packers ....
I'm not too sure of that oldtimer. I'd like to agree that U.S. citizens prefer U.S. products but I don't really think it's true in general.
 
A

Anonymous

Guest
Red Robin said:
Oldtimer said:
Red Robin said:
I'd agree and suggest the only qualifier I know which is if our cattle are worth more to the consumer (which isn't likely) or the packers.

I think they would be worth more to the packer and consumer if country of origin of all meat was required to be provided to the consumer-- M-COOL-- and the US cattle industry would use its checkoff dollars to promote US born, raised, and slaughtered BEEF, instead of the generic beef of the world we currently promote for the Packers ....
I'm not too sure of that oldtimer. I'd like to agree that U.S. citizens prefer U.S. products but I don't really think it's true in general.

I think identifying and promoting our product is our only chance in the long run...We can't compete with the world as generic.....

I only wish we'd had M-COOL and red, white, and blue labels on beef the day after 9-11......
 

Sandhusker

Well-known member
Red Robin said:
Oldtimer said:
Red Robin said:
I'd agree and suggest the only qualifier I know which is if our cattle are worth more to the consumer (which isn't likely) or the packers.

I think they would be worth more to the packer and consumer if country of origin of all meat was required to be provided to the consumer-- M-COOL-- and the US cattle industry would use its checkoff dollars to promote US born, raised, and slaughtered BEEF, instead of the generic beef of the world we currently promote for the Packers ....
I'm not too sure of that oldtimer. I'd like to agree that U.S. citizens prefer U.S. products but I don't really think it's true in general.

We need to actively market our product. Millions upon millions are spent on marketing campaigns because of one fact; marketing works. We haven't even tried yet.
 

Red Robin

Well-known member
Sandhusker said:
Red Robin said:
Oldtimer said:
I think they would be worth more to the packer and consumer if country of origin of all meat was required to be provided to the consumer-- M-COOL-- and the US cattle industry would use its checkoff dollars to promote US born, raised, and slaughtered BEEF, instead of the generic beef of the world we currently promote for the Packers ....
I'm not too sure of that oldtimer. I'd like to agree that U.S. citizens prefer U.S. products but I don't really think it's true in general.

We need to actively market our product. Millions upon millions are spent on marketing campaigns because of one fact; marketing works. We haven't even tried yet.
To be able to market anything successfully, we have to set our product apart convincingly. How can we do that? Safer? Is our beef safer than every other country? Better tasting? Less filling? :lol: VI would ad more control on the feed chain, more consistency, with a lower cost of production. It's the berries boys. Better get in. :lol:
 

Sandhusker

Well-known member
It seems to me that one of the problems we have is costs associated with all the laws we have to comply with - laws that deal with safety - therefore, we can use safety as a selling point. Better tasting? Sure, we can use that angle - companies use it every day. There are a lot of angles we can use, heck, just pay attention to the ads on TV and radio and see what is being used. How about, "US beef, raised here - not where a rain forest USED to be".

I disagree that V.I. lowers the costs of production. If it did, why aren't the integrators raising the animals themselves without the producers? Don't tell me it is because of the costs, because if the costs can be justified, the money can be raised. Looks to me that V.I. just shifts the costs and risks of production - to the guys that don't get rewarded for taking the risk. Sign up for V.I., you'll LOSE your berries!
 

Ben Roberts

Well-known member
Sandhusker said:
Red Robin said:
Oldtimer said:
I think they would be worth more to the packer and consumer if country of origin of all meat was required to be provided to the consumer-- M-COOL-- and the US cattle industry would use its checkoff dollars to promote US born, raised, and slaughtered BEEF, instead of the generic beef of the world we currently promote for the Packers ....
I'm not too sure of that oldtimer. I'd like to agree that U.S. citizens prefer U.S. products but I don't really think it's true in general.

We need to actively market our product. Millions upon millions are spent on marketing campaigns because of one fact; marketing works. We haven't even tried yet.


Sandhusker, what about our check-of-dollars, are they not sent in for marketing? What about CAB, CHB, or any other branded program?

And you say that we haven't even tried yet?

Best Regards
Ben Roberts
 

PORKER

Well-known member
VI would ad more control on the feed chain, more consistency, with a lower cost of production.

And where would the minute by minute audit proof recordkeeping that the consumer could see COME FROM?
 

Mike

Well-known member
VI would ad more control on the feed chain, more consistency, with a lower cost of production.

That's BS RR and you must know the real truth but are simply trying to stir the pot.

The feed chain control would be true but with the big boys controlling it..

Can't specifically speak to the consistency but chicken IS more consistent nowdays.
"BAD" but consistent. It has no flavor............Would that help us?

That lower cost of production you speak of will be passed right on to the top. Just how would VI cause a lower cost of production?

There is no more a reliable method of keeping production costs to a minimum than competition, letting the big boys gain an advantage will lower competition. How would that help either?

The argument about packers going to S.A. is not a VI question but a fairness in import doctrine that has us on a global level.
 

Sandhusker

Well-known member
Good Rev. Ben, "Sandhusker, what about our check-of-dollars, are they not sent in for marketing? What about CAB, CHB, or any other branded program? And you say that we haven't even tried yet?"

The reason I say we haven't tried yet is because we have yet to promote US beef. The check-off is passively marketing commodity beef. We need to aggressively market US beef.

Thanks for bringing up CAB - Robin, is CAB better tasting that the rest? (considering how many Limmys, Simmys, Maine's, etc... that qualify, CAB largely IS the rest....) They're certainly marketing it as superior and, judging by the fast-food chains that sell "Angus burgers" and what not, that strategy appears to be working for them. We can learn something there. One of my best college buddies majored in marketing; she has said many times that people will buy what you tell them why you tell them. I'd go shopping with here every now and then and many times she would point out products people were buying and say, "victims of marketing".
 

rkaiser

Well-known member
But you are still allowing the big boys to gain from the marketing Sandusker. I am talking about CAB. I think the point to learn from all of this is that if we are to save our own asses from a similar plight as the chicken and pork industries, we will need to do it ourselves. Maybe there are a few folks at the producer level feeling satisfied with the extra that they earn from CAB - mostly purebred Angus breeders I assume - but most of the gains are still padding the pockets of those who could give a rats ass if you or I ever survive.

Marketing is the key Sandhusker - but keep the profits from those efforts in the right pockets. CAB or even Mcool - the way it is presently set up would possibly put a few in the producer pocket, but would put more in the pocket of the packer. Same with the Canadian border - who did it or does it help more?

I feel that the only way to fight the control game that the Beef Trust is playing is to take it on ourselves. Stop catering to them. Stop selling them our cattle. It can and does happen. It just need to happen more.

In Canuckland we are controlled by two companies that could be bought our for a couple hundred million dollars. With literally billions in assets - we the producers choose to be led around by the nose ring by these profit driven manipulating bastards. Well some of us do -------------------
 

PORKER

Well-known member
The check-off is passively marketing commodity beef. You got that right !

Whose commoidity ??? Which Breed of BEEF ? Only ScoringAg
 

Sandhusker

Well-known member
rkaiser said:
But you are still allowing the big boys to gain from the marketing Sandusker. I am talking about CAB. I think the point to learn from all of this is that if we are to save our own asses from a similar plight as the chicken and pork industries, we will need to do it ourselves. Maybe there are a few folks at the producer level feeling satisfied with the extra that they earn from CAB - mostly purebred Angus breeders I assume - but most of the gains are still padding the pockets of those who could give a rats ass if you or I ever survive.

Until the big boys are not involved, they will share in the gains. Therefore, they should also pay into the kitty. There ought to be a large group of producers (everybody who sold on the grid) who should be furious over being lied to and subsequently hosed by the packers.

Marketing is the key Sandhusker - but keep the profits from those efforts in the right pockets. CAB or even Mcool - the way it is presently set up would possibly put a few in the producer pocket, but would put more in the pocket of the packer. Same with the Canadian border - who did it or does it help more?

An open border with Canada helps the big packers - that's why they want it open so dang bad. A closed border hand-cuffs them.

I feel that the only way to fight the control game that the Beef Trust is playing is to take it on ourselves. Stop catering to them. Stop selling them our cattle. It can and does happen. It just need to happen more.

Agreed.

In Canuckland we are controlled by two companies that could be bought our for a couple hundred million dollars. With literally billions in assets - we the producers choose to be led around by the nose ring by these profit driven manipulating bastards. Well some of us do -------------------
 
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