LUK Acquires National Beef

New-York based Leucadia National Corporation (LUK - Analyst Report) recently consummated acquiring roughly 78.95% interest in National Beef Packing Company, LLC (National Beef), one of the largest beef processing companies in the United States.

The controlling interest in National Beef was acquired by Leucadia for approximately $867.9 million, to be paid out of the latter’s existing cash and investments. Other minority holders of the target company include U.S. Premium Beef, LLC (USPB), NBPCo and Timothy Klein, and the Chief Executive Officer of National Beef. The parties involved had signed a purchase agreement for the transaction on December 5, 2011.

Pursuant to the terms of the transaction, National Beef becomes a subsidiary of Leucadia. Also, National Beef entered into a Cattle Purchase and Sale Agreement with USPB, according to which the latter will ensure delivery of cattle from its members to National Beef. On the other hand, National Beef will purchase an amount of about 735,385 heads of cattle annually from USPB.

Leucadia engages in manufacturing oil and gas drilling services, gaming entertainment, real estate activities, medical product development operations and various other investment activities in the United States.

We believe the company largely benefits from extensive diversifications into a variety of businesses. The company’s strategy to grow through acquisitions of companies in crisis increases its profitability. However, investing in volatile materials such as base metals reduces the value of the company’s investments. The company competes with other players in the industry including Apollo Investment Corporation (AINV - Snapshot Report) and The Blackstone Group (BX - Snapshot Report), among others.

The current Zacks Consensus Estimate for the fourth quarter of 2011 is a 24 cent loss, representing annual decline of 103.55%. Estimates for the fiscal years 2011 and 2012 are a loss of 64 cents and earnings of $1.58, representing a year-over-year decline of 108.36% and growth of 346.88%, respectively.

We currently maintain a Neutral recommendation on Leucadia.

Please login to Zacks.com or register to post a comment.

Disclosure / Disclaimer Link

Email	Print	Share	Rate Pos	Rate Neg

Loading Stories...

ANALYST BLOG ARCHIVE

Travelers Upgraded to Neutral - We are upgrading Travelers to Neutral from Underperform on the back of strong first-quarter results.

on May 25, 2012

2-for-1 Stock Split for Raven - Raven Industries announced that its Board of Directors has approved a two-for-one stock split in the form of a stock dividend.

on May 25, 2012

Citi Trimming Stake in Akbank - According to a Bloomberg report, Citigroup is trimming its stake in Turkish bank, Akbank T.A.S. Citi is offering 10.1% of its Akbank stake, worth $1.27 billion, for sale.

on May 25, 2012

General Motors to Boost Headcount - General Motors Company is reportedly enlarging its workforce in the Detroit-Hamtramck assembly plant by adding 200 new workers.

on May 25, 2012

It's "Click to Buy" for Retailers - Gone are the days when retail was all about brick & mortar. "Click to buy" is the new name of the game, as "transformation" is the new mantra among the retailers

on May 25, 2012

Mesa Reports Better - Mesa Laboratories reports fourth quarter and fiscal 2012 earnings

on May 25, 2012

Amazon Inks Deal with Paramount - Amazon.com Inc. (AMZN) announced a three-year agreement with Paramount Pictures, extending its archive of films in its streaming video site, Amazon Prime Instant Video.

on May 25, 2012

CarMax Mulling New Store at Raleigh - Used car retailer CarMax Inc. is planning to launch a store in northeast Raleigh.

on May 25, 2012

Biogen Tysabri Canadian Label Update - Biogen recently announced Canadian approval for the Tysabri's label update.

on May 25, 2012

USB Launches Android Credit Card - U.S. Bancorp unveiled an android-compatible credit card application, for the consumers of Recreational Equipment, Inc.

on May 25, 2012

<< Previous 10 Stories

View All

Next 10 Stories>>