Full Fortune sells animal feed business
China Food subsidiary Full Fortune Holdings has agreed to sell the group's animal feed business to Wisehand Planning Co for US$16m.
The animal feed business made an after-tax profit of approximately US$2.49m in 2011 and the total consideration represents an exit multiple in excess of six times post-tax earnings.
The transaction will be completed in milestones and the company expects the first payment of US$4.5m no later than 30 July.
The consideration will consist of three components:
- the existing animal feed business for US$8.75 million;
- the new feed factory for US$5.5 million; and
- the land of which the new factory is being built, for US$1.75 million
Full Fortune is an investment holding company whose trading subsidiaries are principally engaged in the manufacture and sale of branded consumer condiments products and animal feeds in Weifang City and Shou Guang City, in the Shandong province of China.
Fuss Feed was founded in November 1994. Initially focused on the manufacture of compound feed for poultry, cows and pigs; it has since diversified to manufacture higher-margin premix and concentrate feed, operating two production lines at a plant in Shou Guang City, Shangdong.
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