LONDON: Fevara plc (LSE: FVA), an international specialist in livestock supplements, has entered into an agreement for the acquisition of Domino Industria E Comercio LTDA, trading as Macal in the strategically significant Brazilian market.
The initial consideration will be £5.0m, with a further £0.8m-£1.9m of deferred consideration payable in March 2028, subject to business performance, with both elements of the consideration being funded from the Group’s existing resources.
Macal is cash generative and is expected to be earnings accretive to the Group in the first full year of ownership, having delivered EBITDA of approximately £0.7m (unaudited) in the last 12 months. The Group expects to acquire Macal on a cash free, debt free basis with normalised working capital on completion.
The Acquisition represents a compelling strategic fit with Fevara’s ambition to target medium-term access to Brazil’s considerable population of more than 200 million cattle. This provides a highly complementary addition to the Group’s existing northern hemisphere markets which comprise approximately 110 million cattle.
The acquisition comes after a period of extensive market, product and targets evaluation conducted with local specialist resource.
The acquisition is expected to close within 6-8 weeks, on completion of certain deliverables.
Macal is a leading provider of minerals and supplements, offering a wide range of products across several branded lines for cattle, sheep and horses. All products are manufactured at its own site in Campo Grande, Mato Grosso do Sul, Brazil, and sold through its regional distribution and commercial network, supported by strong brands and experienced management and commercial teams.
Currently, Macal’s sales are focused almost entirely within the state of Mato Grosso do Sul, which has 19 million head of cattle and the second-highest cattle density in Brazil. The business is strategically positioned next to Mato Grosso, Goiás and São Paulo states, which together account for a further 67 million cattle, representing significant market potential. Macal’s product range and existing sales capability is highly synergistic with Fevara’s core low moisture block product line which will be introduced in Brazil in due course.
Macal’s management team will remain with the business, working closely with local Fevara country management to extend distribution and to introduce Fevara’s specialist, proven products, adapted for the Brazilian market in due course.
Joshua Hoopes, Chief Executive of Fevara commented: “I’m delighted to announce our first acquisition under our refreshed strategy as an international specialist agriculture manufacturer. As we target expansion in southern hemisphere markets, Brazil represents a natural entry point, given its substantial cattle population and long-term growth potential.
“Macal is a strong strategic fit for Fevara, and I look forward to partnering with its experienced team and leveraging its established commercial network to expand distribution and introduce our specialist products to the Brazilian market.”