Tyson Foods to acquire AdvancePierre Foods for $4.2 billion; seeks to divest non-protein businesses
Tyson Foods and AdvancePierre Foods Holdings have entered into a definitive merger agreement pursuant to which a subsidiary of Tyson will launch a tender offer to acquire all of AdvancePierre’s outstanding common shares for $40.25 per share in cash.
Tyson Foods and AdvancePierre Foods Holdings have entered into a definitive merger agreement pursuant to which a subsidiary of Tyson will launch a tender offer to acquire all of AdvancePierre’s outstanding common shares for $40.25 per share in cash. The total enterprise value of the transaction, which has been approved by the boards of directors of both companies, is approximately $4.2 billion, including $3.2 billion in equity value and $1.1 billion in assumption of AdvancePierre debt.
The offer price represents a 31.8% premium to AdvancePierre’s closing price on April 5, 2017, the most recent unaffected trading day, and a 41.6% premium to the company’s 60-day volume-weighted average trading price ending on April 5, 2017.
“The AdvancePierre leadership team has created significant value through the implementation of a new business management model, focus on quality and service, and attention to the growth opportunities in convenience foods,” said Tom Hayes, Tyson president and CEO. “The addition of AdvancePierre aligns with our strategic intent to sustainably feed the world with the fastest-growing portfolio of protein packed brands … We believe that AdvancePierre and Tyson are a natural strategic fit and together will accelerate growth for customers by delivering on-trend, high-quality products consumers love. We look forward to welcoming AdvancePierre’s dedicated team members to the Tyson family.”
AdvancePierre is a national producer of ready-to-eat lunch and dinner sandwiches, sandwich components, and snacks, with product categories that are complementary to Tyson’s current offerings. This acquisition will further Tyson’s strategic intent to sustainably feed the world with its fast-growing portfolio of protein-packed brands. In addition, AdvancePierre’s product portfolio fits well with Tyson’s strategy to expand its fresh prepared foods offering for both out-of-home and in-home eating occasions. The collective portfolio of sandwiches, sandwich components, entrees, and snacks will extend Tyson’s core strength into the fast-growing convenience and retail perimeter with solutions that span all-day parts.
In related news, Tyson Foods is exploring the sale of three non-protein businesses as part of its strategic focus on protein-packed brands. In February, Tyson Foods announced its strategy to sustainably feed the world with the fastest growing portfolio of protein packed brands. As the company focuses on its growth and value creation, it is exploring the sale of its Sara Lee Frozen Bakery business, the Kettle business, and Van’s. Company officials believe the sale of these businesses will allow Tyson Foods to sharpen its focus on core businesses and expand its protein leadership position in retail and foodservice.
Sara Lee Frozen Bakery, the Kettle business, and Van’s produce items such as frozen desserts, waffles, breakfast bars, soups, sauces, and sides. Any sale would include the Chef Pierre, Bistro Collection, Kettle Collection, and Van’s brands, a license to use the Sara Lee brand in various channels, as well as the company’s Tarboro, N.C., Fort Worth, Texas, and Traverse City, Mich., prepared foods facilities.