Granja Faria buys BL Ovos and expects to earn BRL 2 billion in 2023
Granja Faria is buying BL Ovos for BRL 290 million, paying just under 1x revenue in a sector where transactions typically come out between 0.6x and 1x.
The acquisition – Granja Faria’s 15th – will help the company increase its net sales from R$1.47 billion this year to R$2 billion next year, and bring its EBITDA to R$500 million. Last year, Granja Faria had net revenue of R$920 million.
“This year the egg price went up 20%, FertiFar, our organic fertilizer producer, earned more than R$100 million, and we made several operational improvements,” controller Ricardo Faria told the Brazil Journal. “Next year we will organically expand the company by over 1 million birds.”
Granja Faria competes for market leadership with Granja Mantiqueira, which announced the purchase of Fazenda da Toca two weeks ago and has revenues of around R$ 1.4 billion.
Two reasons justify Granja Faria’s interest in BL Ovos.
The first is operational. According to Faria, the business adds 3 million birds to the commercial squad, which now has 13 million chickens, producing 10 million eggs daily.
In addition, Granja Faria now has 4 million sows producing 3 million fertile eggs, destined for the production of chicks.
The second is geographic. The BL Ovos farm in Espírito Santo, located in Santa Maria de Jetibá, will supply demand in Sergipe, Bahia and part of Rio de Janeiro.
The Goiás unit, still under construction, will increase Granja Faria’s penetration in the Midwest, where the company is still small.
The two new units join the three farms installed in Minas Gerais, two in Rio Grande do Sul and those in Tocantins, Paraná, Santa Catarina and Goiás. Now there are 11 units.
Founded in 2007, Granja Faria is Ricardo Faria’s second biggest business, the entrepreneur from Santa Catarina who is gaining scale in agricultural land through Insolo, which now owns 120,000 hectares.
After selling Lavebras in 2017 for BRL 1.3 billion, Faria dedicated himself to the farm, which at the time produced only fertile eggs and earned BRL 120 million.
That same year, Ricardo joined the board and appointed a new CEO: Denilson Dorigoni, who had started at the company at age 19 as an administrative assistant.
It was Denilson who masterminded the company’s entry into the commercial egg market, which has grown at an annual rate of 5% over the last 15 years.
Granja Faria owns Ares do Campo – a national brand that is best sold at Carrefour and GPA – and five other regional brands. The company has a national market share of 11%.
But while Mantiqueira, its biggest competitor, is betting on building a national brand, Granja Faria has preserved the local brands it acquires, such as Marutani, in Paraná, Iana, in the south of Minas, and Stragliotto, in Serra Gaúcha.
“They are two national consolidators with different strategies,” said a source who accompanies the two companies.
In Brazil, per capita consumption is 260 eggs per year, against 320 in the US and 450 in Japan.
Source: Brazil Journal