Strategic Acquisition Expands Tyson Foods’ Portfolio of Prepared Foods and Protein-Packed Brands, Contributing to Sustainable, Long-Term Growth
Transaction Expected to be Immediately Accretive to Tyson Foods’ EPS, Further Enhanced Over Time by Targeted $200 Million in Cost Synergies
BUZ INVESTORS PRESS RELEASE Tyson Foods to acquire AdvancePierre Foods Tyson Foods, Inc. (TSN) (“Tyson”) and AdvancePierre Foods Holdings, Inc. (NYSE:APFH) (“AdvancePierre”) today announced that they have entered into a definitive merger agreement pursuant to which a subsidiary of Tyson will launch a tender offer to acquire all of AdvancePierre’s outstanding common shares for $40.25 per share in cash. This strategically compelling transaction provides a unique opportunity to create value by joining highly complementary market-leading portfolios.
The total enterprise value of the transaction, which has been approved by the Boards of Directors of both companies, is approximately $4.2 billion, including $3.2 billion in equity value and $1.1 billion in assumption of AdvancePierre debt. The offer price represents a 31.8 percent premium to AdvancePierre’s closing price on April 5, 2017, the most recent unaffected trading day, and a 41.6 percent premium to the company’s 60-day volume-weighted average trading price ending on April 5, 2017.
Funds affiliated with Oaktree Capital Management, L.P. (“Oaktree”), which own approximately 42 percent of the outstanding shares of AdvancePierre common stock, have entered into a tender and support agreement pursuant to which those funds have agreed to tender their AdvancePierre shares pursuant to the tender offer.
Tyson President and CEO Tom Hayes said, “We are very pleased to announce this combination with AdvancePierre. The AdvancePierre leadership team has created significant value through the implementation of a new business management model, focus on quality and service and attention to the growth opportunities in convenience foods. The addition of AdvancePierre aligns with our strategic intent to sustainably feed the world with the fastest growing portfolio of protein packed brands. This transaction will provide an attractive current premium to AdvancePierre shareholders as well as significant ongoing benefits to Tyson shareholders and the customers and team members of both companies. We are 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. We look forward to welcoming AdvancePierre’s dedicated team members to the Tyson family.”
AdvancePierre President and CEO Christopher D. Sliva said, “We couldn’t be more delighted to join Tyson. By combining our complementary, market-leading portfolios, both companies will realize greater opportunities. This combination will allow AdvancePierre to accelerate its growth and broaden its distribution network by leveraging Tyson’s existing distribution infrastructure and go-to-market capabilities. Importantly, the transaction also offers compelling and certain value for our shareholders and will provide long-term benefits for our team members and customers.”
Compelling Strategic and Financial Rationale
The transaction is not subject to a financing condition. Tyson has secured committed bridge financing from Morgan Stanley Senior Funding, Inc. to complete the transaction and retire AdvancePierre’s debt. The tender offer will be subject to customary conditions, including the tender of a majority of the outstanding AdvancePierre shares pursuant to the offer and receipt of required regulatory approvals and is expected to close in the third quarter of Tyson’s fiscal 2017.
Morgan Stanley & Co. LLC is serving as exclusive financial advisor to Tyson and Davis Polk & Wardwell LLP is serving as Tyson’s legal advisor. Credit Suisse Securities (USA) LLC and Moelis & Company LLC are serving as financial advisors to AdvancePierre and Skadden, Arps, Slate, Meagher & Flom LLP is serving as AdvancePierre’s legal advisor. Latham & Watkins LLP is serving as Oaktree’s legal advisor.
Transaction Conference Call and Webcast Information
Tyson Foods will host a conference call today, April 25, at 8:30 a.m. Eastern Time.
Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the operator. Participants may pre-register at any time, up to and including after the call has started.
Those without internet access or who are unable to pre-register may dial in by calling:
|U.S. Toll Free:||1-844-890-1795|
To listen to the live webcast or an archived replay and view accompanying slides, go to the company’s investor website at http://ir.tyson.com. The webcast also can be access by using the direct link http://event.on24.com/wcc/r/1415215/1709C4519FD67506338F79562BBDF3EF.
A telephone replay will be available until May 25 at:
|U.S. Toll Free:||1-877-344-7529|
|Canada Toll Free:||855-669-9658|
|Replay Access Code:||10106157|
The live webcast and audio replay also will be available on the company’s investor relations app. To download the free app, which offers access to SEC filings, news releases, transcripts, webcasts and presentations, please visit the App Store for iPhone and iPad or Google Play for Android mobile devices.
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