Pilgrim’s Pride to acquire ConAgra division
Jun 9, 2003 12:00 PM, from staff and wire reportsThe board of directors of Pilgrim’s Pride Corp, the third-largest chicken producer in the United States, has unanimously approved a definitive share purchase agreement with ConAgra Foods Inc, the nation’s fourth-largest chicken producer, to acquire ConAgra’s chicken division for a combination of cash, stock, and debt valued at about $590 million.
Under terms of the agreement, ConAgra will receive $100 million in cash, approximately $235 million of Pilgrim’s Pride Class A common stock (based on its June 6, 2003, closing stock price of $6), with the balance of some $255 million payable by a subordinated note bearing a coupon rate of 10.5% and due in 2011. The transaction, subject to customary closing conditions, likely will be completed in third-quarter 2003.
As a result of the acquisition, Pilgrim’s Pride would become the nation’s second-largest chicken company with pro forma annual net sales of roughly $5 billion. The addition of ConAgra’s brands, including Pierce, Country Pride, Easy-Entree, and To-Ricos, will expand Pilgrim’s Pride’s prepared foods chicken division. This division has annual net sales of about $890 million and has grown at an average annual compound growth rate of nearly 15% over the past five years.