Nutresa Seeks Further Acquisitions

Colombian food company Nutresa is now fully capitalized for this year after its recent COP522.5bn ($299m) equity follow-on, but could come to the markets again once it finds other acquisition targets, the company’s CFO Ana Maria Giraldo tells LatinFinance. Giraldo points out that with a net-debt-to-Ebitda ratio of just 1x, Nutresa’s leverage is still low. “We have low debt levels and this allows us to look at acquisitions,” she says. The company is looking to spend anywhere between $500m-$600m on its next target and the recent share issue has helped prepare the ground for any potential purchases. Target countries and regions are Peru, Central America, the Caribbean and the US, and Nutresa is now focusing its efforts on the cold cut sector after having bought US biscuit maker Lil’ Dutch Maid in 2010 and ice-cream company Helados Bon in the Dominican Republic this year. Depending on the size of the acquisition, the company may try its luck with a level 3 ADR, Giraldo says. Though Giraldo doesn’t discount international bond issues, she says there are more cost effective sources in the local markets and through bi-lateral loans with domestic banks which are still liquid. “Banks are offering very competitive financing,” she adds. Raising capital in other LatAm bond markets is also a possibility. Indeed, Nutresa was one of the first companies to tap this type of funding source when in 2009 it placed $40m equivalent of 10-year notes among Peruvian institutional investors, paying Libor+1.80%. It also raised local financing in Costa Rica after buying Galletas Pozuelo in 2006, and took out an $85m bi-lateral loan with US boutique Stephens when it acquired Lil’ Dutch Maid.