SAO PAULO (Reuters) - The sale of Keystone Foods LLC to Tyson Foods Inc. (TSN.N) for $2.4 billion concludes a major strategic change for Brazilian meatpacker Marfrig Global Foods SA (MRFG3.SA), which will focus exclusively on beef, its chief financial officer said on Sunday.
The Keystone deal, expected to be announced on Monday, will exclude a beef patty plant in Ohio with annual revenue of $300 million, CFO Eduardo Miron said in a phone interview with Reuters.
Tyson is acquiring all remaining operations of Keystone, which is a key chicken products supplier to McDonald’s Corp.
The Ohio plant, with annual capacity of 91,000 tons of beef patties, will add to the portfolio of National Beef Packing Company LLC, acquired by Marfrig earlier this year.
Proceeds from the Keystone sale will be used to reduce debt significantly by year end, Miron said. Marfrig expects the ratio between net debt and earnings before interest, tax, depreciation and amortization, a common gauge of operational profitability known as EBITDA, to fall from 4.2 to 2.5 in December.
Miron defended the deal value after it was criticized by analysts on Friday and Marfrig shares fell.
Miron said the company more than doubled Keystone’s value from the $1.2 billion paid in 2010 when Marfrig acquired it. On top of the Tyson deal, Marfrig had already sold Keystone’s distribution network for $400 million.
After the Keystone sale and National Beef acquisition, Marfrig does not plan more mergers or acquisitions to increase its portfolio, Miron said. The company may grow organically, but is not interested in acquiring beef assets that Brazilian rival BRF SA will sell in Argentina, he added.
Reporting by Tatiana Bautzer; Editing by Dan Grebler