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Tyson Foods completes $4.2bn acquisition of AdvancePierre

FBR Staff Writer Published 09 June 2017

Tyson Foods has completed the acquisition of AdvancePierre Foods, a provider of ready-to-eat sandwiches, snacks and other food products, for about $4.2bn.

The acquisition to expands its Tyson Foods’ portfolio of prepared foods and protein-packed brands, contributing to long-term growth.

Headquartered in Cincinnati, Ohio, AdvancePierre Foods produces and distributes ready-to-eat sandwiches, sandwich components and other entrées and snacks to a range of distribution outlets in the US including foodservice, retail and convenience store providers.

The company, which employs about 4,500 people, generated revenues of $1.6bn in 2016.

As per the deal, Tyson paid $40.25 per share for AdvancePierre. The deal includes $3.2bn in equity value and $1.1bn in assumption of AdvancePierre debt.

The company also bought all the shares of AdvancePierre with each priced at $40.25, excluding interest.

The deadline of the offer was on June 6, 2017, and the deal included the merger of a subsidiary of Tyson Foods into AdvancePierre.

AdvancePierre Foods produces ready-to-eat lunch and dinner sandwiches, sandwich components and snacks and has over 4500 employees.

The revenue of AdvancePierre Foods was $1.6bn in 2016 and foodservice, retail and convenience store providers are its clients.

The deal, originally signed in April this year, is Tyson Foods biggest since its $8.5bn acquisition of Hillshire Brands of Chicago in 2014.

Tyson Foods president and CEO Tom Hayes said: “AdvancePierre is a natural, strategic fit that will extend our capabilities in new and growing food categories.

“We expect the acquisition to immediately contribute to earnings and are also confident it will result in cost synergy benefits of $200 million within three years.”

Hayes also stated that the integration teams were formed and the firm will focus on maintaining high quality customer service in the transition period. AdvancePierre will now become a subsidiary of Tyson Foods and its shares will be listed on the New York Stock Exchange.

Portland based Barber Foods, acquired by AdvancePierre Foods in 2011, will also be branded under Tyson Foods. Additionally, cost synergies of $200m is expected from the merger.

Funds affiliated with Oaktree Capital Management, which hold about 42% of the outstanding shares of AdvancePierre common stock, supported the transaction.Oaktree Capital Management, holding 42% stake in AdvancePierre, supported the acquisition through a tender and support agreement.

Headquartered in Springdale, Arkansas, Tyson Foods owns brands such as Tyson, Jimmy Dean, Hillshire Farm, Sara Lee, Ball Park, Wright, Aidells and State Fair.

 The company supplies retail and foodservice customers across the US and about 115 countries.


Image: Beef processing at a Tyson Foods location. Photo: courtesy of Tyson Foods, Inc.