Gradus raises BGN 81.4m in Bulgaria’s second biggest IPO



Poultry producer Gradus raised BGN 81.4m from its IPO, the latter being the second largest IPO on the Bulgarian stock market. Gradus placed 45.22 million shares at BGN 1.80 per share raising BGN 79.1m during its IPO auction that took place on 18th and 19th June.

During the first day of the IPO, Gradus placed 43.96 million shares raising BGN 79.1m, while in the second day a total of 1.26 million shares were subscribed for BGN 2.3m. On completion of all regulatory procedures, the Company is expected to officially list on the Bulgarian by the end of June, start of July’18.

Gradus will use the proceeds from the IPO for the implementation of its 2020 strategy. The latter targets the introduction of new poultry products, increase in hatching eggs business production, diversification of pork products portfolio, entrance into the HoReCa sector, as well as possible acquisitions.

Gradus – Bulgaria’s biggest vertically integrated poultry producer

Established in 1992, Gradus is the biggest vertically integrated poultry producer in Bulgaria with a 35% local poultry market share. With total gross built-up area of 500k m2, it owns Balkan’s biggest slaughterhouse with 8 000 chickens/hour capacity, 250+ broiler and parent breeding farms, three hatcheries and a grain storage facility with 95k tons annual fodder capacity.

Focused on high margin export-oriented hatching eggs segment

The Company is Europe’s #2 hatching producer, delivering 120m hatching eggs and 40m 1-day chicks per year. The two subgroups contribute most to its bottom line as they deliver c.40% gross margin. Provides its customers hatching rates of 84%+, way above competitors’ average of 70-75%. 80%+ destined for export in 10+ countries across Europe and the Middle East. Currently, unable to meet increased demand, Gradus seeks to invest BGN 20m of IPO proceeds to up capacity by c.20% to 140+m hatching eggs/year.

Expansion into pork segment and HoReCa sector to further drive growth

In 2016, it entered the highly competitive BGN 1bn pork market building up its own Az Yam brand. Currently producing 160 t/month, mainly sausages, with 600 t/month target by 2022. Aims diversification into high-end meat pork segment to up pork segment’s gross margins to 25%. Plans expansion into growing HoReCa sector and introduce a new high-margin broiler to local market satisfying increasing high-end products demand.

High brand awareness with 100% local coverage

Gradus has built a 99.8% local brand awareness, distributing 80% of its meat products in Bulgaria. Through its well-developed logistics network backed up by 33 specialized trucks and 50 non-specialized vehicles, it has 100% coverage of local retail chains in Bulgaria, present in over 5 000 small food shops.

Website of Gradus