Tyson Foods to acquire Keystone Foods for $2.16B
Tyson Food (TSN) announced it has reached a definitive agreement to buy the Keystone Foods business from Marfrig Global Foods for $2.16B in cash.
The acquisition of Keystone, a major supplier to the growing global foodservice industry, is Tyson Foods’ latest investment in furtherance of its growth strategy and expansion of its protein capabilities.
Headquartered in West Chester, Pennsylvania, Keystone supplies chicken, beef, fish and pork to some of the quick-service restaurant chains, as well as retail and convenience store channels.
Its product portfolio includes chicken nuggets, wings and tenders; beef patties; and breaded fish fillets.
The acquisition includes six processing plants and an innovation center in the U.S. with locations in Alabama, Georgia, Kentucky, North Carolina, Pennsylvania and Wisconsin. It also includes eight plants and three innovation centers in China, South Korea, Malaysia, Thailand and Australia.
Keystone, which employs approximately 11,000 people, generated annual revenue of $2.5B and adjusted EBITDA of $211M in the last 12 months ending June 30, excluding non-controlling interest and other adjustments.
During the same period, the company generated approximately 65% of its revenue from U.S.-based production and the remaining 35% from its Asia Pacific plants.
The acquisition will be funded through a combination of existing liquidity and proceeds from the issuance of new debt. Initial leverage metrics are expected to be well within levels appropriate for the company’s existing investment-grade credit ratings.
The company plans to use its cash flows to pay down debt to continue to support its credit ratings and to strengthen its balance sheet.The transaction, which has been approved by Tyson Foods’ board of directors, is expected to close in mid-fiscal 2019. It is subject to customary closing conditions, including regulatory approvals.
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