May 22 (SeeNews) - Bulgarian meat producer Gradus is contemplating acquisitions of brands in the pork deli segment to complement its portfolio, a senior company official said on Tuesday.
Gradus, which is preparing to list on the Sofia bourse later this year, is looking to add more high-margin products to its portfolio and run its pork processing plant at higher capacity, Georgi Babev, member of the company's board of directors, told SeeNews on the sidelines of a financial conference.
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The company's pork processing plant in Stara Zagora, in southeastern Bulgaria, currently operates at 35% of its capacity,
By the next three or four years the plant is expected to reach full capacity, which is 600 tonnes annually. This is estimated to increase its profit by 7.5 million levs ($4.5 million/3.8 million euro), Babev added.
According to Babev, Gradus is Europe's second-largest producer of breeding eggs for the poultry industry with an output of 120 million eggs in 2017. The company exports about 80% of its breeding egg production, using the remainder for its own needs. In 2017, the gross margin on this product was 44%, the official also said.
The company also says it holds a 35% share of Bulgaria's poultry products market.
In February, Gradus said it will be seeking to raise over 100 million levs via an initial public offering (IPO) on the Sofia bourse. The company expects its upcoming IPO to value the company between 400 million and 520 million levs.
The IPO proceeds will be focused primarily on expanding breeding eggs capacity due to the high demand, Babev noted.
"We submitted our IPO prospectus to the financial regulator last week and we hope to get an approval by the end of the month," he added.
In 2017, Gradus posted a net profit of 39.8 million levs on 245.8 million levs of revenues.
(1 euro = 1.95583 levs)