Dr Pearse Lyons
Dundalk born billionaire Pearse Lyons has said that his fast-growing Alltech animal nutrition business could be worth “between $2.5bn to $3bn” (€2.2bn to €2.63bn) following its latest growth spurt, which has seen revenues jump “comfortably over $1bn”.
This valuation would make it one of the largest, privately owned Irish companies in the world.
Alltech, which has operations in 128 countries, is one of the world’s biggest animal nutrition, brewing and biotech companies, supplying agricultural products for use in both livestock and crop farming. It was set up by Dundalk native Lyons in 1980.
The Kentucky-headquartered firm is rolling out ambitious plans to grow its sales to $4bn.
“That is still on track,” Lyons told the Sunday Independent last weekend.
“We will do it in three ways, through organics growth, acquisitions or we might do joint ventures.
“If you’d asked me four or five years ago, would we be doing big acquisitions, I would have said no. If you’d asked me about doing joint ventures then I would have said no.”
Lyons said that the companies he was looking to buy had sales of between $50m to $100m. He did not rule out a bigger “transformative buyout” saying “we are keeping our gunpowder dry”.
A major investment in fish oil will boost Alltech’s growth trajectory, with Lyons planning to spend “a couple of hundred million” to build a big plant in Kentucky.
The firm is looking to capitalise on the fish oil market, which is worth close to $4bn, according to Lyons. There may also be further investment in Irish operations “in due course”.
The company is also working on a number of major joint ventures, including a deal with Nestle. Alltech has been upscaling operations in China, with Dr Mark Lyons running the business there.
However, China and South-east Asia only account for 25pc of the firm’s revenues, which are equally split between Europe, Asia, Latin America and North America. Alltech had earlier indicated that it may sell off a number of its divisions.
PwC was appointed to examine a potential divestment of its Life Sciences Division, which had a valuation of around €800m. Alltech’s crop sciences business was also readied up for a potential sale, with a €300m price tag.
“We did have a number of very nice bids but we decided that they were more valuable for us to keep,” Lyons said. “That’s not to say that we wouldn’t sell them in the future.”
Lyons indicated that major rivals have expressed interest in buying Alltech in the past. However, the billionaire has no plans to sell the company.
Lyons is also ramping up Alltech’s brewing business and will visit Dublin this weekend for the company’s craft beer festival in Dublin’s Convention Centre.
It is also rolling out an education scheme for potential craft brewers.
Lyons says that the craft brewing “revolution” is “extraordinary”. Sales of craft beer in the US have grown 19pc in the last year, now outselling Guinness.
Alltech’s own product is the top-selling craft beer in Shanghai.