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National Beef’s shareholders to expand operations in North America

Shares of company in Iowa state to be incorporated into National Beef’s capital


The shareholders of National Beef (Marfrig Global Foods through its indirect subsidiary NBM, Jefferies Financial Group, U.S. Premium Beef, TMK Holdings and NBPCo) have decided to increase their investment in the operations of National Beef by agreeing to make a capital contribution using shares to be acquired in Iowa Premium, a company currently owned by Sysco Holdings, LLC. Closing of the acquisition of Iowa Premium is subject to customary conditions, including antitrust approval in the United States, and is expected to close in the second quarter of 2019. Iowa Premium, which is headquartered in Tama, Iowa, has daily processing capacity of 1,100 head of cattle.

“The collective investment in Iowa Premium reflects the company’s optimism regarding the U.S. beef market and the long term focus of our partnership with Marfrig,” said Brian Friedman, president of Jefferies Financial Group, 31% partner in National Beef.

The transaction is worth US$ 150 million. The acquisition price is subject to the post-closing adjustments to working capital and net debt typical in transactions of this kind. Marfrig’s interest in the transaction will be 51%, which represents US$ 76.5 million. “This joint transaction with the other shareholders of National Beef demonstrates our commitment to sustainable growth and is an opportunity to increase our interest in the North America operation,” said Eduardo Miron, CEO of Marfrig Global Foods.

At closing of the acquisition of Iowa Premium, a long-term supply agreement will be signed with Sysco Corporation, a U.S. multinational serving primarily the food service industry.

Upon closing of the transaction, shares in Iowa Premium will be incorporated into the capital of National Beef. With annual sales of approximately US$ 650 million, Iowa Premium operates using only Black Angus cattle and specializes in USDA Choice and Prime beef. “I am excited to expand our beef operations with a processing facility in Iowa and we look forward to strengthening the relationships with the family farmers who produce the highest quality Black Angus cattle in the U.S.,” said Tim Klein, CEO of National Beef and of Marfrig’s North America operation. According to him, “Iowa Premium fits perfectly with our value-based marketing strategy as the company continues to provide customers with the very best beef products and programs.”

“The joint investment in Iowa Premium is a great opportunity for National Beef and for us to continue producing high quality beef for our customers. We are happy to be part of this long term journey with Marfrig and the other partners of National Beef,” said Stan Inville, CEO of US Premium Beef.

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