Pilgrim's Pride (PPC) Acquires Kerry Consumer Foods, Expanding Growth of Euro Operations - Stephens

June 18, 2021 6:56 AM EDT
Get Alerts PPC Hot Sheet
Price: $21.67 +0.65%

Rating Summary:
    7 Buy, 9 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 25 | Down: 37 | New: 115
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Stephens analyst Ben Bienvenu reiterated an Overweight rating and $28.00 price target on Pilgrim's Pride (NASDAQ: PPC) after the company announced that it has reached an agreement to acquire the Meats and Meals business of Kerry Consumer Foods in the UK and Ireland. The acquisition values the assets at $952 million, or 8.5x expected 2021 EBITDA. This transaction looks to be ~10% accretive to FY21 PPC EBITDA, 20c to 25c accretive to EPS in year one and a nice fit into the existing portfolio in Europe. The deal is expected to close in 4Q21.

The analyst stated "While this business has been stable historically, with minimal growth, it also brings higher and more stable margins to the table for PPC, which is a nice complement to the core business. Additionally, while synergies are not a significant portion of the transaction rationale, there is the opportunity to achieve back office and integration related synergies over the next few years."

For an analyst ratings summary and ratings history on Pilgrim's Pride click here. For more ratings news on Pilgrim's Pride click here.

Shares of Pilgrim's Pride closed at $21.61 yesterday.



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