SPRINGDALE, Ark. – After an initial report surfaced on Friday, Tyson Foods announced on Aug. 20 that it reached an agreement to purchase chicken processor Keystone Foods, a subsidiary of Brazil’s Marfrig Global Foods, for $2.16 billion.

Keystone Foods US operations are still based in West Chester, Pennsylvania. The company is a longtime supplier of burger patties, poultry and fish to McDonald’s Corp.

Keystone employs approximately 11,000 employees and generated annual revenue of about $2.5 billion and adjusted EBITDA of $211 million in the 12 months ended June 30.

According to Keystone Foods’ website, the company produces approximately 2 billion lbs. of poultry, 300 million lbs. of beef and 12 million lbs. of pork each year.

“Keystone is a leading global protein company and will be a great addition to Tyson Foods,” said Tom Hayes, president and CEO of Tyson Foods. “This acquisition will expand our international presence and value-added production capabilities and help us deliver more value to our foodservice customers.

The acquisition includes six processing plants and an innovation center in the US with locations in Alabama, Georgia, Kentucky, North Carolina, Pennsylvania and Wisconsin. It also includes eight plants and three innovation centers in China, South Korea, Malaysia, Thailand and Australia.

“Keystone provides a significant foundation for international growth with its in-country operations, sales and distribution network in high growth markets in the Asia Pacific region as well as exports to key markets in Europe, the Middle East and Africa,” Hayes said. “We look forward to serving customers with these additional capabilities and to welcoming Keystone’s dedicated team members to the Tyson Foods family.”  

Tyson stated that the acquisition is funded through a combination of existing liquidity and proceeds from the issuance of new debt. The deal was approved by Tyson’s board of directors and is expected to close in mid-fiscal year 2019. The deal is subject to customary closing conditions and regulatory approvals.

Tyson Foods said it expects the acquisition to be accretive to GAAP earnings per share in the third year and accretive to adjusted eps in the first year. The company also expects to generate annual synergies of approximately $50 million by the third year of the acquisition, driven by operational efficiencies, procurement savings, distribution and supply network optimization and other opportunities.

In June 2010, Marfrig purchased Keystone Foods. During August of 2017, Marfrig planned an initial public offering of Keystone Foods, but it did not occur.

In April, Marfrig agreed to acquire 51 percent of Kansas City, Missouri-based National Beef Packing Co. The company paid $969 million for an equity interest in National Beef, which reported sales of $7.3 billion in 2017, making it the fourth-largest beef processor in the world.