deals

Buyout Said to Value Largest African Feedlot at $450 Million

Updated on
  • Karan Beef’s management may approach PIC to fund deal
  • Farm was started in 1974 and now has 150,000 head of cattle

Photographer: Kevin Sutherland/Bloomberg

Africa’s largest cattle feedlot is considering a management buyout that will value the company based south of Johannesburg at about 6 billion rand ($450 million), according to two people familiar with the matter.

The management of Karan Beef (Pty) Ltd. may approach the Public Investment Corp. -- which manages pension funds of South African government workers -- to assist it with funding, said the people, who asked not to be identified because the information isn’t public. The managers are considering purchasing a part or all of the business depending on the finance available to them, the people said.

Founded by the Karan family on their farm in 1974 with fewer than 100 head of cattle, the company now owns a herd of about 150,000 and has also purchased three adjoining farms, an abattoir and a nearby distribution center, according to its website. Karan Beef is a closely held company, which doesn’t comment on market speculation, the firm said. The company is still fully owned by Ivor Karan, one of the people said.

South Africa was the largest consumer of beef in sub-Saharan Africa in 2017 and the 14th biggest in the world, according to data compiled by the Organisation for Economic Co-operation and Development. The country of about 55 million people consumed 869,400 metric tons of beef in 2017, which compares with 12 million tons in the U.S., the data show.

(Updates with South African beef consumption in final paragraph.)
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