Friday 15 December 2017

Pearse Lyons's Alltech pays €400m for US firm

Alltech founder Pearse Lyons
Alltech founder Pearse Lyons
John Mulligan

John Mulligan

US firm Alltech, which was founded by Dundalk native Pearse Lyons, has agreed to pay almost €400m to buy a Minnesota-based animal nutrition firm.

Alltech, which has interests ranging from animal nutrition, to beer and whiskey, will acquire Ridley in what Mr Lyons described as a "transformative transaction".

Ridley is listed on the Toronto Stock Exchange.

Founded in 1980 in Lexington, Kentucky, by Mr Lyons, Alltech has evolved into a business generating $1bn (€900m)a year in sales. Mr Lyons previously worked for Irish Distillers before moving to the United States. He has estimated that the Alltech business is now worth $3bn (€2.7bn).

"This transformative transaction that combines two industry leaders allows Alltech to deliver better performance and value to livestock and poultry producers across the globe," said Mr Lyons, who indicated earlier this year that he was looking at possible acquisitions or joint ventures to grow the business.

Ridley is one of the largest commercial animal nutrition businesses in North America and its clients include livestock producers as well as equine and pet breeders. Since 1994, it has grown substantially in the US and Canada, through the acquisition of a number of animal nutrition businesses. It also has operations in Kentucky.

Alltech is paying a 23pc premium to Ridley's average closing share price over the last 20 days.

In its last financial year, Ridley generated revenue of $568.7m (€526m) and recorded adjusted earnings before interest, tax, depreciation and amortisation of $39.3m (€36.3m).

Mr Lyons said that Alltech will be able to bring its advanced nutrition technology to market "faster and more effectively" following the acquisition of Ridley.

"This combination creates a new model to deliver superior animal nutrition and tailored feeding programs supported by robust scientific research and data analytics," he said. "This deal underscores our continued momentum in growing our business through strategic acquisitions of best-in-class companies with trusted technology and brand recognition."

The combined company will have a presence in over 128 countries and 4,200 employees worldwide. "By uniting forces we will create a scalable platform to grow and market solutions to enhance the profitability of producers," said Ridley chief executive Steven VanRoekel.

Alltech is wholly owned by Mr Lyons and his family and he has previously indicated that he has no intention of diluting their control over the business, despite approaches being made to buy the company.

He qualified as a biochemist from UCD before doing a PhD in Birmingham, and has retained very strong ties with Ireland.

Alltech has established a whiskey distillery in Co Carlow, and the company has been planning to build another distillery in Dublin. Last year, the company bought a disused church opposite the Guinness Hops Store, which it intends to spend €5m on to convert it to a distillery.

Alltech has also held a craft brewing festival in Dublin.

Irish Independent

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