Marubeni’s takeover includes the acquisition of Creekstone Farms’ Australian subsidiary Rangers Valley, providing the Japanese trader with a strong foothold in two of the world’s top beef-producing regions: Australia and the US.
Terms of the deal were not disclosed, but multiple sources have reported that a fee of $170m, including debt, has been agreed.
Marubeni’s takeover comes as many Japanese consumers see disposable incomes rise, which is increasing local demand for high-end meat, fuelling burgeoning imports of Australian and US beef.
‘Global company’
Japan buys beef from both countries as they have the rich water resources, advanced feed technology and sound environmental practices needed to produce top-of-the-range meat. Creekstone Farm ticks all these boxes, making it an appetising acquisition for Japanese investors.
“Through this acquisition, Marubeni aims to become a truly global company, which contributes to a steady supply of safe, delicious beef while contributing to the society and local economy,” the company said in a statement.
Creekstone Farms was sold to the Japanese trading conglomerate by US investment firm Sun Capital Partners, which has owned the Kansas meatpacker since 2005. During its ownership, the business lifted exports by 800% to account for a fifth of total sales.
Business will ‘continue to prosper’
“We’re proud of our success building Creekstone Farms into a leading international provider of top-grade meats,” said Marc Leder, co-CEO of Sun Capital.
“Throughout the course of this investment, the Sun Capital team partnered with management to drive strategic initiatives that enabled Creekstone Farms to thrive despite broader industry challenges. We are looking forward to seeing the business continue to prosper under its new ownership.”
Jordan Wadsworth, principal at Sun Capital, said the investment firm had been able to turn Creekstone from a “good company into a great one”.
Its investment in the business helped Creekstone increase its line of natural products from less than 5% of product at the time of acquisition to over 20% today.
Creekstone Farms is best known in the US for supplying some of the country’s top grocers and restaurants with Black Angus beef and antibiotic-free Duroc pork. The business also exports to Europe, South America and Asia.