Moy Park in £26m deal to buy key rival

MOY PARK, the Northern Ireland poultry processor owned by the Brazilian food group Marfrig, is to acquire one of its closest rival firms in the North in a deal worth £26 million.

Moy Park, which was purchased by Marfrig just two years ago, has bought the family-owned O’Kane Poultry business, which is based in Ballymena.

In a statement issued yesterday to the Brazilian securities and exchange commission, Marfrig confirmed it intended to acquire 100 per cent of the O’Kane company “for the amount of £13 million due on the closing date and equal amount in June 2011”.

Marfrig said the finance for the acquisition had been “internally generated by Moy Park and it is already available there”.

OKane Poultry, which has been in business since 1932, is one of the North’s largest poultry processing companies.

Its assets, which have been acquired by Moy Park, include two hatcheries, a feed mill, a primary and further processing plant and one laboratory testing facility.

Marfrig has not commented on whether there will be any restructuring that could result in redundancies at O’Kane following the acquisition.

The buyover is subject to both due diligence and regulatory approval but it is expected to be formally approved by early autumn.

O’Kane processes in the region of 120,000 chickens and 5,000 turkeys per day.

It is a key supplier to the retail and food sector and counts Marks Spencer as one of its largest customers.

Last year the company, which employs more than 1,500 people, reported net revenues of £132 million.

Moy Park, whose name is set to become familiar to millions around the globe this summer thanks to a sponsorship deal with the Fifa World Cup, currently employs nearly 7,000 people in Northern Ireland, England, France and the Netherlands.

The most recent financial statements for the company, for the year to December 2008 two months after it was acquired by Marfrig, show that Moy Park’s turnover stood at a total of £738 million.

Moy Park is major supplier to Tesco Ireland, Dunnes Stores and Superquinn.

Moy Park chief executive Nigel Dunlop believes the acquisition of the Ballymena business will bring new opportunities because it will create an organisation with “the scale and sustainability of supply needed to meet the very significant growth opportunities that exist across Europe”.

Mr Dunlop said: “O’Kane Poultry is attractive to Moy Park because it complements our existing business model bringing new sources of supply, processing capabilities and market expertise.

“I am confident that this acquisition will prove to be a very strategic and positive development for the Northern Ireland agri-food sector and enhance the contribution it makes to the wider Northern Ireland economy”.

It is likely that the combined company will employ in the region of 8,500 people, with around 5,000 based in Northern Ireland, where it will operate contracts with approximately 760 local producers.

The acquisition marks a new chapter for the O’Kane company. Its chairman, Billy O’Kane, the son of founder WP O’Kane, said yesterday that it had “always been a business with strong family values and its future, and the future of its workforce matters deeply to us”.

Mr O’Kane said he believes the Marfrig acquisition means the firm will be “well placed in the hands of a highly professional company such as Moy Park also with strong Northern Ireland roots”.