GREELEY, Colo. – Officials with Pilgrim’s Pride Corp., a business unit of São Paulo, Brazil-based JBS SA, announced plans to acquire GNP Co., St. Cloud, Minnesota, from its parent company, The Maschhoffs LLC. The all-cash, $350 million transaction is expected to close in the first quarter of 2017 pending regulatory approval and review. The addition of GNP’s Just Bare line of natural and organic poultry products to Pilgrim’s portfolio is complementary to its strategy to grow its operations in new markets.
Bill Lovette, Pilgrim’s CEO said, “GNP Co. boasts outstanding state-of-the-art assets in geographic areas where Pilgrim’s is not currently present, providing Pilgrim’s the opportunity to expand our production and customer bases, while maintaining our high standards for quality service and great-tasting products.”
According to a statement, Pilgrim’s expects to realize $20 million in annual operating synergies in production and distribution and it plans on capturing an estimated present value of approximately $28 million in tax savings and a post synergies EBITDA multiple of 3.9.
“The Pilgrim’s team is excited to combine the collective strengths of Pilgrim’s Pride and GNP Company,” Lovette said.
“GNP Co.’s operational competencies and use of innovative technologies, including gas stunning, aeroscalding and automated deboning, will enable Pilgrim’s to significantly increase the rate of adoption of new technologies in existing facilities, enhancing the company’s production efficiencies and operational excellence,” he said.
GNP was acquired by The Maschhoffs, a family owned, pork production company based in Carlyle, Illinois, in 2013. Josh Flint, PR and communications manager with The Maschhoffs, told MEAT+POULTRY, the acquisition demonstrates his company’s continued focus on the hog production industry.
“This represents the Maschhoff family’s commitment to the hog business,” he said, “while setting GNP up for long-term success as one of the world’s premier chicken-producing companies.”
Flint said the sale of GNP was not result of it being an underperforming business unit and is merely part of The Maschhoffs’ long-term strategy to solidify its role serving pork-processing customers.
Pilgrim’s expects the acquisition will be accretive to the company’s diluted earnings per share in 2017 and said the combined company will deliver strong financial results, including a stronger capital structure and improved cash flow.