Tyson Foods to buy packaged sandwich supplier AdvancePierre for $3.2 bn
25 April 2017
Tyson Foods Inc, the largest US meat processor, today struck a deal to buy packaged sandwich supplier AdvancePierre Foods Holdings Inc for about $3.2 billion in cash, in order to expand its portfolio of prepared foods and protein-packed brands.
Arkansas-based Tyson is offering to pay $40.25 per share, a 9.8 per cent premium to AdvancePierre's Monday close.
The deal, which has an enterprise value of about $4.2 billion, includes $1.1 billion of AdvancePierre debt.
Private equity firm Oaktree Capital Management, which owns around 42 per cent of AdvancePierre, has agreed to tender its shares to the offer.
Tyson has secured committed bridge financing from Morgan Stanley Senior Funding, Inc. to fund the transaction and pay off AdvancePierre's debt. The proposed acquisition is expected to close in the third quarter of Tyson's fiscal 2017.
Tyson expects the transaction to generate synergies of approximately $200 million within three years.
Cost synergies will be created by a consolidated manufacturing footprint, procurement efficiencies, distribution network consolidation, and addressing redundant sales and marketing functions and duplicative corporate overhead.
Cincinnati, Ohio-based AdvancePierre is a leading producer and distributor of value-added, convenient, ready-to-eat sandwiches, sandwich components and other entrées and snacks to a wide variety of distribution outlets including food service, retail and convenience store providers.
With revenues of $1.6 billion in 2016 and approximately 4,500 employees, the company offers a broad line of products including, ready-to-eat sandwiches, sandwich components, and other entrées and snacks.
Tyson President and CEO Tom Hayes said, ''This transaction will provide an attractive current premium to AdvancePierre shareholders as well as significant ongoing benefits to Tyson shareholders and the customers and team members of both companies.''
''By combining our complementary, market-leading portfolios, both companies will realize greater opportunities. This combination will allow AdvancePierre to accelerate its growth and broaden its distribution network by leveraging Tyson's existing distribution infrastructure and go-to-market capabilities,'' said, AdvancePierre president and CEO Christopher Sliva.
Tyson is one of the world's largest food companies with leading brands such as Tyson, Jimmy Dean, Hillshire Farm, Sara Lee, Ball Park, Wright, Aidells and State Fair.
The company supplies retail and food service customers throughout the US and around 115 countries.