Seneca Foods Corp. Wants to Buy Allens Inc. In $148M Deal

by Lance Turner  on Tuesday, Dec. 17, 2013 7:47 am  

Seneca Foods Corp. of Marion, N.Y., said Tuesday that it has entered into an asset purchase agreement to acquire "substantially all the operating assets" of Allens Inc. of Siloam Springs, the privately held canning company that filed Chapter 11 bankruptcy in October.

The deal is worth $148 million.

In a news release, Seneca said its purchase agreement will serve as the "stalking-horse bid" in the auction process, meaning Seneca has the opportunity to match any other bids Allens might receive. Allens will have to seek bankruptcy court approval of Seneca's purchase agreement as the stalking horse bid and other bid procedures.

Seneca said that if it's successful, Allens' assets will fit with its "long-term growth objective" to expand its canned vegetable offerings to include sweet potatoes and southern vegetables and broaden its offerings of dry beans and spinach.

Jonathan Hickman, Allens' chief restructuring officer, said the company was happy to reach a deal with Seneca. 

"We are encouraged by the interest Allens has received and are committed to an outcome that provides the most value for our creditors," Hickman said in a news release (PDF). "I would also like to thank our talented employees – the interest we are seeing in our business is a direct reflection of their continued hard work and dedication."

The Sale Process

In November, Arkansas Business reported that Allens bankruptcy filings showed nearly 60 companies were considering buying the 87-year-old cannery, and that Allens wanted to appoint one of at least three potential buyers as a "stalking horse" bidder. The filing didn't name the companies that wanted to be named stalking horse bidder.

Monday evening, Allens filed revised documents in the Western District U.S. Bankruptcy Court to set terms for the auction and to name Seneca as the stalking horse bidder. Allens said it "has received interest from several financial and strategic bidders, many of whom are expected to be active participants in the auction."

Allens' stalking horse contract with Seneca says Allens will reimburse Seneca Foods up to $1.5 million for expenses in connection with the bid. The contract also includes a $5 million break-up fee.

The deadline for other companies to submit bids for Allens is 4 p.m. Jan. 14. The auction is scheduled for 10 a.m. Jan. 21 at the Mitchell Williams law firm in Rogers. The auction wouldn't take place, and Seneca could buy Allens outright, if Allens doesn't receive any other qualified bids.

A hearing to approve the sale is scheduled for Jan. 24 in bankruptcy court.



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