Smithfield Foods Eyes $10.73 Billion Valuation in US IPO
The US initial public offering (IPO) market is poised for a record-breaking week, with Smithfield Foods, a leading pork producer, targeting a valuation of up to $10.73 billion. This move marks a significant milestone for the company, which has been absent from the US stock market for over a decade.
A New Chapter for Smithfield
Hong Kong-based WH Group, the world’s largest pork producer, is spinning off Smithfield into a listed company, creating a separate fundraising platform for its US and Mexico businesses. This strategic move is expected to unlock new growth opportunities for Smithfield, which has a rich history dating back to 1936.
IPO Details
Smithfield and WH Group are offering 17.4 million shares, priced between $23 and $27 each, to raise up to $939.6 million in the IPO. The proposed valuation target is roughly double Smithfield’s net asset value of about $5.38 billion as of September 30. This significant increase in valuation is a testament to the company’s growth potential and market demand.
A Leader in the Meat Industry
Smithfield, whose rivals include Tyson Foods and Hormel Foods, has established itself as a major player in the meat industry. The company produces a range of packaged meats and pork products under brands such as John Morrell, Cook’s, and Gwaltney. Its customer base includes retail giants like Walmart, fast-food chains like McDonald’s, and food distributors like Sysco.
Post-IPO Plans
After the offering, WH Group will maintain control of Smithfield. The company plans to utilize the IPO proceeds to invest in infrastructure, automation, and capacity expansion, further solidifying its position in the market. Morgan Stanley, BofA Securities, and Goldman Sachs are the lead underwriters for the IPO. Smithfield will list on the Nasdaq under the symbol “SFD.”
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