Fitch: Acquisition of EWOS Neutral to Cargill's Ratings

CHICAGO--()--Fitch Ratings views the recently announced EUR1.35 billion acquisition of EWOS from Altor Fund III and Bain Capital Europe III as neutral to Cargill's credit profile. Cargill will purchase seven feed manufacturing facilities and two R&D and Technology Application centers from EWOS.

Proceeds from the recent sale of Cargill's pork assets to JBS S.A. are expected to partially fund the transaction, which is currently awaiting anti-trust review.

With worldwide protein demand on the rise, Fitch believes farmed fish represents an opportunity for Cargill to expand its business into an increasingly important segment of the protein industry. Fitch views the EWOS acquisition as a positive step in diversifying Cargill's animal nutrition business. EWOS produces more than 1.2 million metric tons of feed for the largest salmon producers in the world.

Salmon feed is one of the most technologically advanced segments in aquaculture, according to Cargill. Fitch believes Cargill will be able successfully leverage the R&D capabilities of EWOS and transfer them to Cargill's growing footprint within the aquaculture industry that should experience solid long term growth prospects.

Cargill's gross leverage is 2.5x, RMI adjusted leverage is 1.4x and EBITDA of USD4.9 billion for LTM period ending May 31, 2015.

The transaction is subject to regulatory approvals and expected to close by the end of the year.

Additional information is available at 'www.fitchratings.com'.

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Contacts

Fitch Ratings
Primary Analyst
Michael Zbinovec
Senior Director
+1-312-368-3164
Fitch Ratings, Inc.
70 W. Madison St.
Chicago, IL 60602
or
Secondary Analyst
Bill Densmore
Senior Director
+1-312-368-3125
or
Media Relations:
Alyssa Castelli, New York, +1 212-908-0540
Email: alyssa.castelli@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Michael Zbinovec
Senior Director
+1-312-368-3164
Fitch Ratings, Inc.
70 W. Madison St.
Chicago, IL 60602
or
Secondary Analyst
Bill Densmore
Senior Director
+1-312-368-3125
or
Media Relations:
Alyssa Castelli, New York, +1 212-908-0540
Email: alyssa.castelli@fitchratings.com