Jefferies Financial Group Inc., the largest independent, full-service global investment banking firm headquartered in the U.S., has entered into a definitive agreement to sell its remaining 31% interest in National Beef to Brazil’s Marfrig Global Foods. Marfrig had already purchased 48% interest in National Beef in June 2018.
Under the terms of this agreement, Jefferies will realize a total of $970 million in cash, including $860 million of proceeds from Marfrig and $110 million from final distributions from National Beef. Closing is expected on or about Nov. 30, 2019, and is subject to limited and customary closing conditions.
The transaction will result in Jefferies recognizing a pretax gain of approximately $210 million. The remaining interest in National Beef was valued at $903 million as of May 31, 2019, the company said. Since that date, it has received $66 million in distributions and now a further $970 million for the remaining interest.
“We have sold our interest in National Beef at what we consider an attractive price and in furtherance of our stated strategic goals of focusing and investing in investment banking, capital markets and asset management, simplifying our overall company, reducing volatility and lumpiness in our results and returning excess capital to shareholders,” Jefferies chief executive officer Rich Handler and president Brian Friedman said.
The sale brings Jefferies’ “incredibly successful” investment in National Beef to a close, they noted. “Having initially invested $868 million to acquire 79% of National Beef eight years ago, we persevered during National Beef’s severe downturn and were rewarded with strong cash distributions from operations and now the sale of our remaining interest. We will have realized an aggregate of almost $3 billion in cash, or 3.3 times our original investment in National Beef,” Handler and Friedman said.
They continued, “We have every confidence that Marfrig and National Beef are exceptionally well positioned for long-term success.”