Three important Romanian meat processors up for sale

Three entrepreneurial companies in the meat processing business in Romania are testing investor interest in a potential deal, according to Ziarul Financiar (ZF). The three are Meda Prod 98, Kosarom and Agra’s.

The talks or deals are in various stages now, with Meda Prod 98 negotiations having made the most progress, market sources say. Meda Prod 98, a company founded by entrepreneur Luchi Georgescu, had not returned ZF’s calls for comment by press time. Neculai Apostol, the founder of the 1,300-employee Kosarom group denies a potential sale and Agra’s officials in Alba Iulia said no comment.

The meat processing market in Romania remains dominated by entrepreneurial businesses with international names like Smithfield and Sigma Alimentos having gained some ground in the industry in the last few years, mostly through deals.

ZF sources said most often the buyer is a strategic investor, not a private equity firm. The latter tends to get the most for its money, which means its investments are devised for a shorter period of time than those of a company in the business with long-term plans.

Unlike dairy, the meat and cold cuts market has seen fewer deals. The market is heavily fragmented, so consolidation should happen, ZF sources say. Good companies in this sector can get a multiple of 8 to 10 of their EBITDA upon evaluation.

Interest in food industry businesses can be explained not only by an intention to gain market share but also by this sector having shown its crucial role once more during the pandemic, when local production became more important than ever.