Marfrig Global Foods S.A.

On June 7, 2018, Marfrig acquired a 51% stake in National Beef Packing Co. LLC (National Beef) from Leucadia for a total of $970 million. The acquisition was funded through a bridge loan of $900 million from Rabobank plus a long-term loan of $100 million. Considering the full consolidation of National Beef's numbers, Marfrig's leverage ratios have improved because National Beef has lower debt levels and stronger EBITDA generation. Marfrig also divested its subsidiary Keystone Foods LLC, selling a 100% stake to Tyson Foods (BBB/Positive/A-2) for a total enterprise value of $2.4 billion. On Dec. 3, Marfrig received the net cash proceeds from the sale of $1.4 billion, or about R$5.4 billion (deducting the net debt position and minority interest

...The repositioning of its business and financial profiles with recent M&As supported its upgrade. The two recent merger and acquisition (M&A) transactions improved Marfrig's leverage, which on a pro forma basis should result in net debt to EBITDA close to 4.0x for 2018 and 2019 from 5.6x in 2017. This will mainly result from the use of Keystone sale cash proceeds along with bond issuances this year to significantly restructure debt--pre-paying the bridge loan and other more expensive debt to lower the interest burden. This lower leverage, along with sustainable strong EBITDA at National Beef, will help improve cash flow generation. On June 7, 2018, Marfrig acquired a 51% stake in National Beef Packing Co. LLC (National Beef) from Leucadia for a total of $970 million. The acquisition was funded through a bridge loan of $900 million from Rabobank plus a...

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