Brazil Food Co. Sells Subsidiary for $2.4 Billion

Brazilian meatpacker Marfrig Global Foods said on Monday it had closed a deal to sell its indirect subsidiary Keystone Foods Holdings Limited to US firm Tyson Foods Inc. The enterprise value of the transaction was about $2.4 billion, Marfrig said in a statement, adding that the proceeds would be used to reduce debt and boost Marfrig’s capital, Reuters reported. The sale concludes a major strategic change for Brazilian meatpacker, which will focus exclusively on beef, its chief financial officer said. 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, Marfrig’s CFO Eduardo 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.