SNEAK PEEK: Inside The Maschhoffs-GNP deal
Dec. 23, 2013
by Bryan Salvage
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CARLYLE, Ill. – With hog-centric décor and walls adorned with old and new photos of hogs, farms and smiling hog producers, visitors at The Maschhoffs’ corporate headquarters in Carlyle, Ill., can’t help but realize the company has deep roots in hog production. But feathers flew when officials from the largest family owned pork-production company in North America announced it completed its acquisition of the GNP Company, a chicken-processing company and its subsidiaries, based in St. Cloud, Minn., on Dec. 16. The deal turned many heads in the industry and is the topic of Meat&Poultry’s
exclusive cover story in the January, 2014 issue.
Leading the combined company is Jason Logsdon, who was appointed CEO of The Maschhoffs in 2012. Prior to assuming the leadership role, he served as the company’s CFO since 2003 and was also named executive vice president of product supply and operations in 2010.
“We’re excited about this new partnership,” said Logsdon, who has a bachelor’s degree in agricultural economics and previously worked at Merrill Lynch. "By joining forces, we can leverage our core strengths, capitalize on growth opportunities and create new value in the marketplace—thus, making the combined company stronger than each would be separately. Over time, the companies will share best practices, leverage select strategic shared resources and benefit from the balance-sheet strength of an organization that is diversified across multiple proteins.”
“We intend to create cross-functional teams to identify opportunities to leverage our size and efficiencies in traditional areas like insurance, legal, procurement of raw materials and risk management,” Logsdon said.
The Maschhoffs is owned by fifth-generation family members Ken Maschhoff, chairman of the board; his wife, Julie, vice president of public policy and public relations; Ken’s brother Dave Maschhoff, senior consultant; and his wife, Karen, purchasing lead. All four serve on The Maschhoffs board of directors. The company partners with Midwest family farmers to produce enough pork to feed more than 16 million consumers annually.
Mike Helgeson, GNP Company CEO and third-generation leader, was named CEO of The Maschhoffs’ new chicken business unit. Mike has worked in every area of the family business since he was 12 years old before being named CEO in 1993.
This transaction provides the capital and long-term resources GNP Company needs to grow to meet increasing sales demand for its products under its brands, Helgeson said.
This acquisition will benefit The Maschhoffs in several ways. “It provides us a separate growth platform to deploy some of our free cash flow,” Logsdon said. “This allows us to reduce the growth rate of our pork business from that 25 percent annual growth rate down to a more manageable growth rate [such as 10 percent], which allows us to redouble our efforts on quality, service and operational execution.”
GNP Company’s Cold Spring, Minn. integrated complex includes a production plant primarily for retail tray-pack production that processes about 1 million birds per week. Its Arcadia, Wis. integrated complex also operates a plant that processes 1 million birds per week, primarily producing deli and foodservice product lines.
“Our plan is to grow the Cold Spring and Arcadia facilities over time,” Helgeson said. “As we develop our plans, we continue to adopt automation where we can implement it in our operations. I expect brick-and-mortar expansion, as well.”
Although employees of newly acquired firms may be apprehensive about their future, reaction from GNP Company team-members and growers about its acquisition has been very positive, Helgeson said. “Jason and I recently visited all of our locations and spoke directly with our team members about the acquisition,” he added. “Our people understand why we’re doing it, they see the opportunities for future growth and they are very excited to partner with a company like The Maschhoffs.”
For more information on this deal, read Meat&Poultry’s
cover story in its January 2014 issue.