JBS Foods International files $3.08B shares offering

by Erica Shaffer
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KANSAS CITY, Mo. – JBS Foods International filed for an ordinary shares offering of up to $3.08 billion. According to the Securities and Exchange Commission (SEC) filing, JBS SA plans to transfer all of its businesses — other than its Brazilian beef business and related activities, including its leather business, to New Holdco. New Holdco will be a wholly-owned subsidiary of JBS Foods International, and JBS SA will become a consolidated subsidiary of JBS Foods International while remaining listed on the Novo Mercado segment of the BM&F Bovespa.

The regulatory filing is part of a global restructuring of JBS SA that will make JBS Foods International the new parent company of the JBS Group. JBS Foods International expects to complete the transaction in the fourth quarter of 2016 pending shareholder approval and other regulatory and legal conditions.

After the global reorganization, JBS Foods International will become the new holding company of the JBS Group, and the existing shareholders of JBS SA also will become shareholders of JBS Foods International. JBS Foods International intends to list its ordinary shares on the New York Stock Exchange under the symbol “JBS” and sponsor a Brazilian Depository Receipt (BDR) program to list BDR on the BM&F Bovespa.

Once complete, the global reorganization will “better reflect our global presence and diverse international operations by obtaining a NYSE listing for the JBS Foods International ordinary shares,” the company said in the SEC filing, while improving access to international equity and debt capital markets which enable the company to generate financing to support operations, fund growth and lower capital costs.

The reorganization also will “enhance our ability to participate in the expected further consolidation of the global food industry and to better compete with other global food companies for international development opportunities,” according to the filing.

SEC documents show that JBS Foods International reported consolidated net revenue for the three-month period ended March 31, 2016 and the years ended Dec. 31, 2015, and 2014 was R$43,911.9 million (US$12,338.3 million), R$162,914.5 million (US$45,775.4 million) and R$120,469.7 million (US$33,849.3 million).

JBS Foods International sold products in approximately 190 countries on five continents, with at least 80 percent of gross revenue from sales generated outside of Brazil. As of March 31, JBS Foods was one of the largest:

  • beef producers and exporters in the world in terms of capacity, with operations in the United States, Brazil, Argentina, Paraguay, Uruguay, Australia and Canada and a total daily slaughtering capacity of approximately 82,400 head of cattle;
  • poultry producers in the world in terms of capacity, with operations in the US, Mexico, Puerto Rico, Brazil and the United Kingdom with a total daily slaughtering capacity of approximately 13.8 million chickens;
  • pork producers in the US and Brazil in terms of capacity, with total daily slaughtering capacities of approximately 89,700 hogs and 20,800 hogs, respectively. JBS Foods also operates one pork facility in Australia with a daily slaughtering capacity of approximately 4,000 hogs;
  • lamb and sheep producers and exporters in the world in terms of capacity, with operations in Australia and a total daily slaughtering capacity of approximately 23,100 lambs; and
  • leather tanners in the world in terms of capacity, with operations in Brazil, the US, Australia, Argentina, Mexico, China, Uruguay, Italy, Germany and Vietnam with a total daily production capacity of approximately 95,000 hides.

JBS also is a significant producer of further-processed and value-added meat products, with a total monthly production capacity of approximately 204,100 tons as of March 31, the company said.

The company’s fresh products include fresh and frozen cuts of beef, pork, lamb and sheep, whole chickens and chicken parts. Processed and value-added meat products include frozen, cooked, canned, seasoned, marinated and consumer-ready items.

Additionally, the company produces and sells animal by-products derived from beef processing operations. Hides are sold to customers in the shoe, clothing and automobile industries, among others. In Brazil, the company also produces and sells personal hygiene and cleaning products, collagen, biodiesel fuel and metal cans.

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