Tyson Foods to Acquire AdvancePierre Foods in $4.2B Deal

Tyson Foods Inc. of Springdale announced Tuesday a $4.2 billion deal to purchase all outstand shares of AdvancePierre Foods Holdings Inc. of Cincinnati, a national producer and distributor of value-added, ready-to-eat sandwiches, sandwich components, entrées and snacks.

The deal, which adds to Tyson Foods' portfolio of branded and value-added packaged foods, includes  $3.2 billion in equity value and $1.1 billion in assumption of AdvancePierre debt. Tyson (NYSE: TSN) is paying $40.25 per share for the company, a 32 percent premium to AdvancePierre's April 5 closing price (NYSE: APFH). 

The deal is the company's biggest since its $8.5 billion purchase of Hillshire Brands of Chicago in 2014.

"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," CEO Tom Hayes said in a news release. "We look forward to welcoming AdvancePierre's dedicated team members to the Tyson family."

In a news release, Tyson Foods said the deal AdvancePierre's product portfolio fits well with its strategy to expand its fresh prepared foods offering.

"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," the company said. "The Barber Foods brand of value-added chicken products has a strong heritage in both retail and foodservice channels and we look forward to building upon its foundation of quality."

The company also said the deal would result in cost synergies of about $200 million, fully realized 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," the company said.

AdvancePierre President and CEO Christopher D. Sliva said combining the two firms will allow both to 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," Sliva said. "Importantly, the transaction also offers compelling and certain value for our shareholders and will provide long-term benefits for our team members and customers." 

The deal is set to close in the third quarter.

Tyson Foods announced the acquisition the morning after saying it would explore the sale of three of its brands: Sara Lee Frozen Bakery, Kettle and Van's.

Arkansas Business will update this story.

from Restaurants & Food - ArkansasBusiness.com http://www.arkansasbusiness.com/article/116600/tyson-foods-to-acquire-advancepierre-foods-in-42b-deal