Time to sell at Marfrig
Marfrig is now the most visible example of how uncontrolled growth can disrupt a company. Over the past five years the group has bought 22 companies, which multiplied its turnover ten-fold and made it the third-largest meat processor in the world, making former butcher Marcos Molina one of the most powerful businessmen in Brazil.
The problem for Molina and Marfrig is that the price to pay for all this growth has been very high. Molina is R$ 7.8 billion in debt. Investors, spooked by the bill, have fled. Today, Marfrig is worth 40% less than on the day of its IPO in 2007.
So, Molina has decided that a reversal was required: as shown in a document obtained exclusively by Brazilian business magazine Exame, he hired the investment bank Itaú BBA to sell 40% of Seara to investment funds. He wants to raise R$ 2 billion and at the end of the process pay down Marfrig’s debt.
Information provided by Exame