A man wearing a mask and face shield looks at monitors at Indonesia Stock Exchange in Jakarta last Thursday. (B1 Photo/Mohammad Defrizal)

Japfa Comfeed Gains After Unveiling $83m Plan to Acquire Chicken Nugget Maker


AUGUST 31, 2020

Jakarta. Share of Japfa Comfeed Indonesia, one of the country's largest listed poultry feed company rose to its highest level in six weeks on Monday after the company unveiled its plan to acquire a food processing firm for $83 million.  

Japfa Comfeed shares gained 8.4 percent to close Rp 1,220 apiece on Monday's trade at Indonesia Stock Exchange, moving against selling pressures that drag down the market index by more than 2 percent. 

According to a prospectus made public last week, Japfa Comfeed and ist subsidiary Ciomas Adisatwa will buy So Good Food — which makes frozen chicken nuggets and dumplings, among others — for Rp 1.21 trillion ($83 million) from Jupiter Foods dan Annona, two companies fully owned by Japfa Comfeed's parent company, the Singapore-based Japfa. 

"The acquisition of So Good Food is a strategic step for the Company in expanding its downstream business, namely by increasing the capacity of its processed meat production facilities and also increasing the direct marketing and sales of processed products to consumers," Japfa Comfeed wrote in the prospectus. 

"So Good Food has leading brands for consumer food products, some of which are pioneers in relevant segments, which are recognized in the consumer market for their quality, taste and affordable price," the company said. 

Also, Japfa Comfeed and So Good already had an established live poultry supply arrangements which would "make the integration as well as the synergy and value creation processes, easier and faster than if the company acquired a business with no prior business dealings," the company said. 

Japfa Comfeed and Cinemas Adisatwa planned to pay 30 percent of the purchase price in cash on Nov 30. Japfa will also pay the remaining 70 percent using promissory notes. 

The promissory notes would bear an annual interest equal to 2.25 percent above the one-month Jakarta Interbank Offered (JIBOR) since April 16 until the company paid the notes in full. The interest would be calculated daily.