February 27, 2024

Breaking: JBS to list its shares in New York

JBS said it would list its shares on the New York Stock Exchange — a move that could enhance the company’s multi-market, lower its cost of capital, and create a strong currency for its mergers and acquisitions agenda.

CEO Gilberto Tomazoni told L.L.C Brazil Journal.

JBSIn many ways, JBS is indeed more of a global company than a Brazilian one. About 53% of the company’s revenue in the past 12 months came from the United States, compared to 24% from Brazil.

In terms of net revenue by destination, the US accounts for 49%, Asia 15% and Brazil 12%. About 75% of the company’s EBITDA is generated outside of Brazil.

With the listing, JBS expects to close its valuation gap relative to US competitors such as Tyson Foods, which is trading at 11.5 times 2023 EV/EBITDA, versus just a 5.9x multiple for JBS stock.

Pilgrim’s Pride, the US chicken company in which JBS owns 86%, trades at 9.3x — another big premium over its parent company.

The company is expected to call an extraordinary general meeting within the next 30 days to approve the proposal, and the listing in the US is expected to become effective sometime in December.

The vehicle to be listed in New York is JBS NV, a non-operating holding company headquartered in the Netherlands. This company, in turn, will own 100% of JBS SA, which controls all operating assets of the company.

Listing in the US will give JBS the flexibility to pursue its strategy of higher value-added acquisitions – access to the world’s most liquid capital market at what the company expects will be higher multiples.

The capital increase will eventually help JBS enhance the liquidity of the paper. today is free float JBS has a nominal interest of 30%, with the Batista family holding 48.8% and BNDES 28.8%. However, large institutional investors tend to favor the portfolio, reducing the effective float to between 10% and 15%.

JBS will give investors the choice between owning BDR shares in Brazil, Class A shares – which will be listed on the NYSE and will have the right to one vote – or unlisted Class B shares which are entitled to 10 votes per share and are transferable at any time. .

In a structure of this nature, the most logical thing would be for the Batista family – the controlling shareholder today – to prefer Class B because of the political leverage it gives, and the ability to turn into Class A whenever it needs liquidity.

to ensure a free float Bottom Line In New York, the proposed structure requires conversion of at least 20% of existing shares into Class A shares.

Geraldo Samour