Carton to stay in Manor Farm following sale

Carton brothers Vincent and Justin will continue to run Manor Farm for at least three years following the company’s €70m sale this week. On Tuesday, it was announced that the eighth-generation family owned business was sold to Swedish poultry company Scandi Standard in a cash and shares deal.

Scandi Standard generated sales in excess of €610m last year with operating profits of about €25m, giving the business a healthy profit margin of 4% to 5%. The Swedish company is about five times the size of Manor Farm, which had sales of €160m in 2016 and earnings (EBITDA) of €12.5m.

The €70m deal for Manor Farm will see majority owners Vincent and Justin Carton given a combination of a cash payment, which will be used to clear Manor Farm’s debts, and 9.99% of the shares in Scandi Standard, making the two Carton brothers the largest shareholder in the Swedish company.

Both Vincent and Justin Carton will also take up seats on the board of Scandi Standard as part of the deal, while Vincent Carton has expressed an interest in playing a greater role with the running of the Swedish company’s business.

Based on Tuesday’s closing share price for Scandi Standard of €5.66 (SEK55.50), the Carton brothers’ stake in the business is worth more than €34m.

Family decision

Headquartered in Shercock, Co Cavan, Manor Farm employs approximately 850 people and accounts for about half of all the fresh chicken sold in Ireland.

Speaking to the Irish Farmers Journal on Tuesday, Vincent Carton confirmed that the process to sell the company was shaped by family decisions. Neither of Vincent’s nor Justin’s daughters are interested in making the company a ninth-generation business.

“They [their daughters] knew they didn’t want to go into chicken. That was very clear to us,” Carton explained.

“After that, it has been finding someone to take on the business, particularly with the values we’re interested in. We just didn’t want to be part of another big conglomerate,” he said.

Carton explained that Scandi Standard is the only chicken processor in the world that sells 100% campylobacter-free and salmonella-free chicken and uses very low levels of antibiotics in its chickens.

“It was only when we learned of the Scandi Standard model that we became interested. They’re a chicken-only company and not a protein player, like JBS,” he said.

As part of the deal, the current Manor Farm management team will remain in situ for a period of time.

“It’s very much not a case of the Carton family taking the money and running. We see the opportunity with these guys to take the business even further,” said Carton.

For Manor Farm growers, the message is that it will be business as usual according to Carton, who spent much of this week ringing his poultry farmer suppliers to personally tell them the details of the deal.

Further development

The aim will be to continue to develop the Manor Farm business, which Carton believes will benefit significantly from the takeover thanks to Scandi Standard’s wider customer base, particularly for fifth quarter products.

“At the moment, we export 30% of what we produce but that’s only 12% of our value,” said Carton.

“One thing that has jumped off the page to us is the markets for byproduct that Scandi has.”

He said that at present, Manor Farm sells only one chicken leg in the Irish market for every 12 fillets. But with the markets that Scandi Standard has for chicken legs, feet and fifth quarter offal, it should lead to increased business.