Grupo Lala completes purchase of Brazil’s Vigor and Itambé for $1.54bn

Mexican food company Grupo Lala has completed the purchase of 99.9% and 50% shares in Brazilian dairy companies Vigor Alimentos and Itambé Alimentos, respectively, for a total implied value of R$5.02bn ($1.54bn).

If the Cooperativa Central dos Produtores Rurais de Minas Gerais (CCPR) is expected to exercise its right of first refusal to buy 50% of the remaining Itambé shares belonging to Vigor, the net implied value of the deal would be R$4.32bn ($1.32bn).

CCPR could exercise the right under its existing shareholders’ agreement with its partner Vigor.

Grupo Lala originally entered an agreement in August for the acquisition of 100% shares of both Vigor and Itambé for R$5.72bn ($1.75bn).

The transaction was subject to customary closing conditions, governmental authorisations and shareholder agreements.

Grupo LALA CEO Scot Rank said: “I am sure that Lala and Vigor are a solid combination to build a leading company in Brazil of healthy and nutritious products since they have the scale, portfolio, innovation and talent needed.

“With this acquisition, Grupo Lala continues building a profitable business of value-added products.”

Established in 1917, Vigor operates three milk collection centres, nine production sites and 19 distribution centres with a total of more than 3,900 employees.

While the firm has a strong footprint in Brazilian states of Sao Paulo, Minas Gerais, and Rio de Janeiro, its distribution centres are reported to reach 47,000 points of sale.

It is estimated that the firm will see a revenue of R$2.40bn ($739.7m) in net sales this year.