Verus International Inc (VRUS)

[Mithras]

Is this the Monster…hiding in plain sight?

Something that sparked my curiosity in the Verus corporate presentation was the very purposeful use of the Tyson brand logo positioned directly next to the photo of the Spinneys Grocery store (Page 14). It still strikes me as very bold.

Verus Corporate Presentation

Tyson’s share price is up huge this year and the company has been on an acquisition conquest with a focus on international targets and distribution (meat and plant based protein). I highly recommend taking the time to read the recent articles linked below.

Tyson Foods CEO Looks to Make International Acquisitions

From the article:

“A broader international presence would make Tyson less reliant on the ups and downs of the U.S. meat sector, where processors like Tyson, Pilgrim’s Pride Corp. and Hormel FoodsCorp. are grappling with low prices and growing meat supplies.

“It is in fact spreading the risk if you do have operations in countries outside the United States,” Mr. White said.

The U.S. meat industry faces challenges as chicken and pork production rise to record levels this year, according to U.S. Agriculture Department projections. Cheap and abundant meat has sharpened the competition between low-cost goods like hamburgers and chicken nuggets and has cut into chicken demand for suppliers like Tyson.”

“Tyson in August struck a $2.16 billion deal to acquire Keystone Foods, a major meat supplier to McDonald’s Corp. and other restaurant chains. That deal, which Tyson expects to close by mid-2019, will add new U.S. plants along with facilities in China, Malaysia and Thailand. Tyson executives said Keystone’s international facilities over time could produce more products for sale across the Middle East and northern Africa.”

Why Tyson Foods Stock Popped 51.2% in the First Half of 2019

From the article:

“Tyson Foods further spurred its momentum with its acquisition of the Thai and European businesses of BRF S.A. in early June. The purchase positions the company to capitalize on substantial international growth opportunities, especially as industry experts believe roughly 90% of global protein consumption growth will occur outside the U.S. over the next five years.”

I think it goes without saying that Verus values its investors at every level but it is very apparent that the company operates and executes with a focus on large scale, institutional investment. The corporate presentation was not tailored for the retail level...and if you’re a $25 billion dollar company with executives focused on expanding in Asia (Southeast Asia is primarily Islamic), the Middle East and Northern Africa (MENA), a company like Verus already offers:

- An enormous ($100 mm +) existing backlog
- Is forecasting triple digit growth for the next six quarters.
- Will most likely be profitable as of last quarter.
- Already distributes and rebrands your products in region(s) where you
are focusing on expansion.
- Existing Verus GCC business pays 9 to 1 in revenue.

Excerpts from the corporate presentation:

Page 5 - Verus has significant experience selling into the Gulf Cooperation Council (GCC) countries via its operations in Dubai. This is one of the fastest growing food and consumer product markets in the world.

Page 13 - In many of our markets, Halal (Islamic food handling regulations) certification is an essential requirement in product labeling. We have significant experience with this process. In the GCC countries, our products must meet both Halal and USDA standards. Halal Experience is an Advantage for Verus. Halal expertise makes Verus a desirable partner for firms looking to penetrate this massive global market segment.

Page 19 - Existing, primarily GCC business has a 9X multiplier in inventory turns where each $1 can generate $9 in revenue. The year-one multiplier for M&A is projected at 3X to 20X+ for each $1 invested.

Verus IR has responded to several investors that it is not taking uplist off the table for 2019 and has been in late stage negotiations with unnamed parties for a period of time that suggests both thoroughness and significance. The more execution I see by Verus, the more convinced I become that the company is the acquisition target – not the other way around.

Also, the P.O. Box in Dubai and reserved booth at Gulfood for 2020 says Tyson wants in but I don't find any Tyson product moving direct in the region...

Gulfood 2020 - Tyson