.
Ekuiti Nasional Berhad (Ekuinas) has divested its entire equity in Primabaguz Sdn Bhd (PrimaBaguz), a leading manufacturer of premium halal meat-based products, to Johnsonville International LLC (Johnsonville) based on an enterprise value of RM175.0 million.
This strategic acquisition of PrimaBaguz will enable Johnsonville to pursue its ambitions in setting up a halal food hub within the region.
PrimaBaguz, established in 1987, is a manufacturer of over 100 premium and high-quality halal meatbased products, and caters to more than 15 brands in Malaysia and 10 other countries.
The company works closely with and supplies to local and global food industry players who are primarily in the Quick Service Restaurant (QSR) and hotels, restaurants and caterers (HORECA) segments, as well as wholesalers.
In a statement, Syed Yasir Arafat Syed Abd Kadir, Chief Executive Officer of Ekuinas said with this divestment, it has promoted foreign direct investment in the food manufacturing industry and that Johnsonville plans to make PrimaBaguz its halal hub throughout Asia and the Middle East markets.
According to Michael Suprick, President of Johnsonville International, the investment in PrimaBaguz allows them to further expand their international footprint into Southeast Asia, particularly Malaysia. The company was selected after submitting the best offer and the best fit under a sale process that attracted the interest of a number of local and international parties.
“With the country’s strong market share in the halal food manufacturing industry, we look to use PrimaBaguz’s capabilities to further penetrate markets looking for premium meats, both within Malaysia and in growing markets throughout Asia and the Middle East,” Suprick added.
Johnsonville, founded in 1945, is one of the leading processed meat companies in the U.S. with market-leading products for breakfast, dinner and snacking occasions. The company produces sausages, meatballs and other protein items for the retail, wholesale and foodservice markets and their products are now available in more than 50 countries.
The sale attracted significant foreign direct investment and generated a Gross Internal Rate of Return (IRR) of 22.1% and money multiple of 3.8 times the capital invested, which is part of Ekuinas’ careful portfolio strategy that is in line with the current market condition. With this, it will bring the company’s total realisation proceeds to RM3.1 billion.
Ekuinas’ value creation plan (VCP) for PrimaBaguz has resulted in a 75.0% growth in revenue since their entry in 2013, primarily driven by the increase in its manufacturing capacity and product range.
Syed Yasir further commented that specific initiatives within the VCP include capacity improvements and operational enhancements, diversification of the manufacturing lines to cater to product customisation required by various clients, strategic supplier partnerships with popular fast food chains, as well as strengthening its management team.
With these improvements in place, PrimaBaguz was able to tap into different segments within the industry and meet the increasing demand locally and regionally.
