Growth Strategy for a Major European Animal Nutrition Business with Strategic Expansion into Mexican Animal Feed Market

AMR (acquired by Stax in 2022) assisted Provimi in making a major strategic move into the Mexican animal feed market.

Client and project overview

Provimi, a major European animal nutrition business, wanted to build a presence in the Mexican market and had identified a potential acquisition target. AMR was asked to provide input on the achievability of the business plan in light of numerous risk factors.

Key questions

• What is the structure of the Mexican animal feed market and how is it changing (including industrialization)?
• How have external factors impacted the target’s performance?
• What are the target’s sources of competitive advantage and how sustainable are there?

Highlights of methodology

• Developed a sophisticated understanding of the external factors influencing the target’s performance, including underlying demand, industrialization, macro shocks, regional variation and competition
• We combined this with a thorough review of the target’s internal data (including pricing) and customer base

Results

• Our work proved critical to allowing the deal to go ahead, based on the key finding that recent volatility in the target’s performance was caused by one-off, external factors and the underlying performance was highly stable
• Our analysis of customer preferences also identified clear value-creation potential
• Based on clear recommendations from AMR, the business was able to perform significantly ahead of budget in year one

“The sale of Provimi is the culmination of a four-year project to reshape the business and maximize shareholder value. AMR played a critical role in supporting Provimi as we realized this vision, and helped provide valuable support in the course of a smooth and well-run transaction.” (Provimi)