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Tyson Foods Completes $4.2B AdvancePierre Purchase

2 min read

Tyson Foods Inc. of Springdale said Wednesday that it has completed its $4.2 billion deal to purchase AdvancePierre Foods Holdings Inc. of Cincinnati, a national producer and distributor of value-added, ready-to-eat sandwiches, sandwich components, entrées and snacks.

The deal, originally announced in April, is the company’s biggest since its $8.5 billion purchase of Hillshire Brands of Chicago in 2014. It adds to Tyson Foods’ portfolio of branded and value-added packaged foods, a key area of the company’s strategic plans. 

AdvancePierre, which went public last year (NYSE: APFH), reported annual revenue of $1.6 billion in 2016 and has about 4,500 employees. The company’s history dates the founding of Pierre Foods in 1946. 

Per the deal, Tyson paid $40.25 per share for the company. The deal includes $3.2 billion in equity value and $1.1 billion in assumption of AdvancePierre debt.

“AdvancePierre is a natural, strategic fit that will extend our capabilities in new and growing food categories,” Tyson Foods President and CEO Tom Hayes said in a news release. “We expect the acquisition to immediately contribute to earnings and are also confident it will result in cost synergy benefits of $200 million within three years.”

Hayes said integration teams have been formed and that “the company will remain focused on maintaining high quality customer service during the transition.” The company said AdvancePierre is now a wholly owned subsidiary and that AdvancePierre’s shares will cease to be traded on the New York Stock Exchange.

Tyson’s acquisition has drawn a legal challenge by AdvancePierre investor Stephen Bushansky, who proposed a class-action lawsuit alleging the companies didn’t disclose enough information about the deal in securities filings.

Shares of Tyson (NYSE: TSN) were trading at $60.11 on Wednesday.

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