Meat processor National Beef, Inc. revealed Wednesday in a filing with the U.S. Securities and Exchange Commission or SEC that it estimates a pricing of between $15.00 and $17.00 per share for its proposed initial public offering or IPO to sell 17.25 million Class A common stock to raise up to $300 million. The company intends to have its Class A common stock listed on the New York Stock Exchange under the ticker symbol "NBP."
In mid-October, National Beef had initially announced its intention to launch an IPO to raise up to $300 million.
The Kansas City, Missouri-based company said it plans to use a portion of the proceeds from the IPO of its Class A common stock to acquire units of National Beef Packing Co. LLC. BofA Merrill Lynch and Credit Suisse Securities USA LLC are acting as the joint book-running managers for the offering.
The company also announced that the underwriters may also purchase up to an additional 2.58 million shares of Class A common stock to cover overallotments, if any.
National Beef, Inc. was incorporated in October 2009 for the purpose of becoming the managing member of, and holding an ownership interest in National Beef Packing Co. LLC. National Beef, the nation's fourth-largest beef processor, sells fresh and frozen beef, case ready beef and beef by-products to customers in the U.S. and international markets.
National Beef will own 28.2% of the outstanding new units in National Beef Packing Co. LLC immediately after and giving effect to this IPO offering and the reorganization, assuming no exercise of the underwriters' overallotment option, and computed based on an IPO pricing of $16.00 per share.
For the fiscal year ended August 29, 2009, National Beef reported that net income rose 14.8% to $142.9 million from $124.5 million posted in the previous year, while total net sales declined 6.8% to $5.45 billion from $5.85 billion posted last year. In fiscal year 2008, National Beef generated sales of $5.8 billion and processed 3.8 million head of cattle. The company noted that it intends to pay an initial annual dividend of $0.28 per share of Class A common stock commencing in the first quarter of fiscal year 2011.
The company accounted for about 14% of the federally inspected steer and heifer slaughter in the U.S. during the company's fiscal year ended August 29, 2009, as reported by the U.S. Department of Agriculture or USDA. National Beef's announcement of an IPO comes about seven months after it called off a proposed US$560 million acquisition by Brazil-based world's largest beef producer JBS SA, as the deal was challenged on antitrust grounds by the Justice Department and 13 states. Meanwhile, JBS' North America unit in its U.S. operations, JBS USA Holdings, Inc., has also filed with U.S. market regulators in July to make a $2 billion initial public offering.
Beef products represent the largest segment of the U.S. meat industry based on retail sales and the U.S. is the largest producer of beef in the world, producing about 26.0 billion pounds of beef in calendar 2008. According to the USDA, beef consumption in the U.S. increased to about 27.3 billion pounds in calendar 2008 from about 24.1 billion pounds in 1992, representing a compound annual growth rate of 0.8%.
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