GREELEY, COLO. — Pilgrim’s Pride Corp., a subsidiary of JBS S.A., has announced a definitive agreement to acquire GNP Co. for $350 million in an all-cash transaction.
With production facilities in Gold Spring and Luverne, Minn., and Arcadia, Wis., GNP provides premium branded and custom chicken products with distribution in nearly all 50 states under the Just Bare and Gold’n Plump brands. The company has approximately 400 family farm partners and more than 1,700 employees. The transaction is expected to close during the first quarter of 2017 and remains subject to regulatory review and approval and customary closing conditions.
|Bill Lovette, c.e.o. of Pilgrim's Pride|
“The Pilgrim’s team is excited to combine the collective strengths of Pilgrim’s Pride and GNP Co.,” said Bill Lovette, chief executive officer of Pilgrim’s Pride. “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.”
Additionally, Pilgrim’s Pride plans to leverage GNP’s use of innovative technologies, such as gas stunning, aeroscalding and automated deboning, to enhance its production efficiencies. The addition of GNP’s Just Bare product lines joins Pilgrim’s existing no-antibiotics-ever and organic production capabilities, strengthening the company’s footprint in fast-growing and higher-margin chicken segments.
The $350 million purchase price reflects an expected EBITDA multiple of 5.2x, excluding potential synergy gains. Pilgrim’s expects to achieve approximately $20 million in annualized synergies and to capture an estimated present value of approximately $28 million in tax savings and a post-synergies EBITDA multiple of 3.9x. The company anticipates the acquisition will be accretive to the diluted earnings per share in 2017.
“Today’s announcement is a clear demonstration of Pilgrim’s commitment to our growth strategy of disciplined acquisitions that enhance both our portfolio of value-added products and our ability to provide key customers with the high quality products demanded by consumers,” Mr. Lovette said. “We look forward to welcoming GNP Co.’s team members and family farmer partners to the Pilgrim’s team as we continue to position Pilgrim’s as the preferred choice of consumers and retail and food service partners across the country.”