Pilgrim’s accretive acquisition, announced on 29 November in Colorado, US, is set to increase the poultry player’s annual earnings per share by around $20m.
Pilgrim’s and GNP have signed a definitive agreement that binds both parties to the deal and records the conditions of the sale.
GNP’s expertise in modern gas stunning, aeroscalding and automated deboning will significantly enhance Pilgrim’s production and operational efficiency.
Praise for GNP’s ‘outstanding assets’
“The Pilgrim’s team is excited to combine the collective strengths of Pilgrim’s Pride and GNP Company,” said Bill Lovette, Pilgrim’s CEO, in a statement.
“GNP Company 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.”
The move will see Pilgrim’s add GNP Company’s portfolio of organic, humanely-raised and no-antibiotics-ever poultry products to its range. This will greatly enhance Pilgrim’s position in its key markets – the US, Puerto Rico and Mexico – as a leading provider of high-quality, clean chicken.
Tax savings
Pilgrim’s said earnings before interest, tax, deductions and amortisation (EBITDA), a measure of operational profitability, could increase significantly. It also expects to enjoy an estimated $28m in tax savings and will improve its capital structure and cash flow capabilities.
“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,” Lovette added.
“We look forward to welcoming GNP Company’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 foodservice partners across the country.”
GNP has been a wholly-owned subsidiary of Maschhoff Family Foods – one of America’s largest family-owned pork producers – since its acquisition back in 2013. GNP said it would not be commenting on the planned acquisition until all the regulatory and customary closing conditions were met.
A Maschhoff Family Foods spokesman told this site: “The sale of GNP Company represents our strong commitment to the long-term success of the American pork industry”.