by Lance Turner
Posted 2/7/2014 11:34 am
Updated 7 months ago
Allens Inc. of Siloam Springs, the 87-year-old family-owned vegetable processor and food-service provider that filed bankruptcy last year, officially announced Friday that Sager Creek Acquisition Corp. has reached a deal to purchase Allens' operations and assets.
Arkansas Business was first to report the $160 million transaction on Tuesday. Sager Creek was the high bidder at a bankruptcy auction for the company in New York, which began on Monday.
Filings describing the Sager Creek purchase put the price of the acquired assets at $124.7 million. The additional value of assumed liabilities, cure amounts and excluded assets pushed the total value of the deal to $159.9 million.
Allens said Sager Creek is owned by "investment funds managed or advised by Sankaty Advisors LLC and GB Credit Partners LLC."
In the Allens news release, Sankaty is described as "the independently-managed credit affiliate of Bain Capital LLC." It describes GB Credit as the investment management affiliate of Gordon Brothers Group.
Allens said a hearing in bankruptcy court to approve the sale is scheduled for Tuesday.
"As we had anticipated, the auction process for Allens' assets was robust and competitive," Jonathan Hickman, Allens' chief restructuring officer, said. "We are pleased with the result of the auction and believe that the selected bid maximizes the value of Allens' assets for the benefit of our creditors.
"Sankaty and GB Credit Partners have been investors in Allens for some time and understand the business well," he added. "We believe their winning bid demonstrates continued confidence in Allens' brands and its people, as well as its future prospects."
The back-up bidder in the auction is McCall Farms Inc. of Effingham, S.C. Allens can select McCall as the successful bidder if Sager Creek is unable to consummate the deal.
If the judge approves Sager Creek's bid, Allens will have to pay Seneca Foods Corp. of Marion, N.Y., a $4.5 million break-up fee. Seneca emerged in December as the "stalking-horse" bidder in the auction, pledging to bid $148 million for Allens' assets.
On Friday, Seneca Foods CEO Kraig Kayser would only tell the Rochester Business Journal that his firm was not successful in the auction. He decined further comment.
In bankruptcy filings, Allens cited nearly $290 million in debt and $295 million in assets.