OldDog/NewTricks
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Smithfield buys Premium Standard Farms for $810 million
by Pete Hisey on 9/18/2006 for Meatingplace.com
Smithfield Foods is paying a 13 percent premium to purchase Kansas City, Mo.-based Premium Standard Farms for about $810 million in cash, stock and assumed debt of $117 million. Smithfield said it expects the deal to close in early 2007, and doesn't expect to close any Premium Standard plants or significantly reduce workforces.
The purchase of the No. 2 hog grower, with about $1 billion in revenues, makes Smithfield even more dominant in the pork industry. The company said that all hog production contracts will be honored and that Smithfield will continue to purchase hogs on the open market.
The deal breaks down to about $690 million in stock and cash, depending on the stock price at completion, with about $1.25 per share of that in cash, and $117 million in assumed debt. Premium Standard has operations in Texas, North Carolina and Missouri, and has a sow herd of over 220,000, which compares to Smithfield's herd of nearly a million.
by Pete Hisey on 9/18/2006 for Meatingplace.com
Smithfield Foods is paying a 13 percent premium to purchase Kansas City, Mo.-based Premium Standard Farms for about $810 million in cash, stock and assumed debt of $117 million. Smithfield said it expects the deal to close in early 2007, and doesn't expect to close any Premium Standard plants or significantly reduce workforces.
The purchase of the No. 2 hog grower, with about $1 billion in revenues, makes Smithfield even more dominant in the pork industry. The company said that all hog production contracts will be honored and that Smithfield will continue to purchase hogs on the open market.
The deal breaks down to about $690 million in stock and cash, depending on the stock price at completion, with about $1.25 per share of that in cash, and $117 million in assumed debt. Premium Standard has operations in Texas, North Carolina and Missouri, and has a sow herd of over 220,000, which compares to Smithfield's herd of nearly a million.
