MHP acquired controlling interest in Ukrainian meat production plant Lubnym`yaso
MHP, an agro and industrial holding founded and chaired by Yuri Kosyuk, acquired a 51% share in Lubnym`yaso LLC, a Ukrainian meat production plant, the Group's report reads.
As of the date of acquisition, net assets of the acquired plant amounted to USD 1,529 thou.
Goodwill in the amount of USD 788 thou. is attributable to the expectation that this acquisition will support the Group's strategic transformation to a culinary company through launch of additional products.
Lubnym`yaso main economic activity is the production and sale of beef under the trade mark Scott Smeat.
Forbes reported that Lubnym`yaso was founded in 2012 by Andrey Naumenko, a former manager of foreign economic relations at MHP. The plant's production capacity is 25 t of meat products per day.
The company supplied beef to Meat Markets (Ukr. «Мясомаркет») and Doner Markets. According to Andrey Naumenko, the acquisition will provide Lubnyyaso with more opportunities for growth. At the same time, he retained his position as the company's director after the purchase.
Finteum strategist Andreiy Nesteruk marked that investors have more confidence in culinary companies rather than in commodity ones. According to him, meat producers are traded on exchanges at an EBITDA multiple of no more 10x, while multiples of service companies go as high as 20-30.
"If MHP manages to transform itself and become a service company, it will increase its capitalization many times over," he assumed.
As part of the transformation, the company started disposing of unprofitable assets. Snyatynska poultry farm was sold in 2020, which carried out goose meat and foie gras operations. Another MHP's subsidiary which carried out grain storage operations, Dobropilskyi GPP PrJSC, was sold in 2021.
In H1 2021, MHP reported USD 232 mln of net profit vs. a loss of USD 62 mln in H1 2020.