In a move which Tyson Foods believes will be a great strategic move for both companies, the food industry giant has announced it will be acquiring packaged sandwich supplier AdvancePierre for a total of $4.2 billion.
“We are very pleased to announce this combination with AdvancePierre. 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. The addition of AdvancePierre aligns with our strategic intent to sustainably feed the world with the fastest growing portfolio of protein packed brands,” Tyson President and CEO Tom Hayes said. “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.”
For a total of $40.25 per share in cash, a subsidiary of Tyson will launch a tender offer to acquire all of AdvancePierre’s outstanding common shares. According to a press release, the total enterprise value of the transaction is approximately $4.2 billion, including $3.2 billion in equity value and $1.1 billion in assumption of AdvancePierre debt. The company explained that this offer price represents a 31.8 percent premium to AdvancePierre’s closing price on April 5, 2017, the most recent unaffected trading day, and a 41.6 percent premium to the company’s 60-day volume-weighted average trading price ending on April 5, 2017.
“We couldn’t be more delighted to join Tyson,” AdvancePierre President and CEO Christopher D. Sliva shared. “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. 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 expected to close during Tyson's fiscal third quarter and will result in cost synergies of about $200 million, to be realized within three years.