Tyson Foods has agreed to acquire AdvancePierre Foods, a portfolio company of Oaktree Capital Management, for a total enterprise value of $4.2 billion, including $3.2 billion of equity value and $1.1 billion of assumed AdvancePierre debt.
Oaktree acquired Pierre Foods out of bankruptcy during the 2008 recession and two years later merged it with Oklahoma-based Advance Foods and its sister company Advance Brands to form AdvancePierre. In July 2016, the company was taken public by Oaktree. Funds affiliated with Oaktree still own approximately 42 percent of the outstanding shares of AdvancePierre common stock.
AdvancePierre Foods (NYSE: APFH) is a national producer and distributor of value-added, convenient, ready-to-eat sandwiches, sandwich components and other entrées and snacks to foodservice, retail and convenience store providers. The company offers a broad line of products across all day parts including: ready-to-eat sandwiches, such as breakfast sandwiches, peanut butter and jelly sandwiches and hamburgers; sandwich components, such as fully cooked hamburger and chicken patties, and Philly steaks; and other entrées and snacks, such as country-fried steak, stuffed entrées, chicken tenders and cinnamon dough bites.
AdvancePierre Foods had revenues of $1.6 billion in 2016 and has more than 4,500 employees. AdvancePierre is led by President and CEO Christopher Sliva and is headquartered in Cincinnati (www.advancepierre.com).
Tyson Foods is one of the world’s largest food companies with leading brands such as Tyson®, Jimmy Dean®, Hillshire Farm®, Sara Lee®, Ball Park®, Wright®, Aidells® and State Fair®. It’s a recognized market leader in chicken, beef and pork as well as prepared foods, including bacon, breakfast sausage, turkey, lunchmeat, hot dogs, pizza crusts and toppings, tortillas and desserts. The company supplies retail and foodservice customers throughout the United States and approximately 115 countries. Tyson Foods was founded in 1935 by John W. Tyson, whose family has continued to lead the business with his son, Don Tyson, guiding the company for many years and grandson, John H. Tyson, serving as the current Chairman of the Board of Directors. The company is headquartered in Springdale, AR (www.tysonfoods.com).
Yesterday, Tyson announced that it was exploring the sale of its Sara Lee® Frozen Bakery business, the Kettle business and Van’s®. These businesses produce frozen desserts, waffles, breakfast bars and soups, sauces and sides. Rothschild is acting as Tyson Foods’ financial advisor on these sales. “Tyson is always prudently evaluating opportunities to leverage our strengths to drive future growth, whether by divesting non-core, non-protein focused assets – as announced yesterday – or by acquiring companies like AdvancePierre that enhance our capabilities in growing categories. 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,” said Tom Hayes, president and CEO of Tyson Foods.
Oaktree Capital Management makes investments in distressed debt, corporate debt (including high yield debt and senior loans), control investing, convertible securities, real estate and listed equities. The firm has over 900 employees and $100 billion in assets under management and is headquartered in Los Angeles (www.oaktreecapital.com).
This transaction is not subject to a financing condition. Tyson has secured committed bridge financing from Morgan Stanley Senior Funding to complete the transaction and retire the assumed debt of AdvancePierre.
Morgan Stanley & Co. is the financial advisor to Tyson and Davis Polk & Wardwell is serving as Tyson’s legal advisor. Credit Suisse Securities (USA) and Moelis & Company are serving as financial advisors to AdvancePierre and Skadden, Arps, Slate, Meagher & Flom is serving as AdvancePierre’s legal advisor.
© 2017 Private Equity Professional | April 26, 2017
