(Adds company comments on when deal will close, revenues)
By Theopolis Waters
CHICAGO Nov 22 The Maschhoffs, LLC, the
country's largest family-owned pork producer, agreed to buy U.S.
chicken company GNP Company for an undisclosed amount, the two
companies announced on Friday.
The companies will operate as separate entities following the
closing of the transaction, which should be sometime in
December, The Maschhoffs spokesman Chuck Sanger told Reuters.
The acquisition will not immediately impact GNP's chicken
business or Maschhoffs' pork production operations.
"Our intent is to manage GNP Company as a separate business
unit next to our current pork production business," The
Maschhoffs Chief Executive Officer Jason Logsdon said in the
"GNP Company will continue to be led by its present
management team, with the support of its current team members
and contract growers," he said.
The merger will allow both companies to leverage their core
strengths and capitalize on growth opportunities, Logsdon said.
"The Maschhoffs are very successful in the pork business,
but this is a total change getting into the chicken business,"
said Ron Plain, livestock economist at the University of
Missouri, who was surprised by the deal.
Plain said it is possible that The Maschhoffs were uneasy
about having all their money tied up in pork and decided to
invest in another meat protein.
"I'm always skeptical when someone gets into a totally new
line of business. The Maschhoffs have an excellent track record,
but knowing what you're doing with hogs doesn't mean you know a
whole lot about the broiler industry," he said.
Sanger said the operations at GNP will be "business as
usual" because the Maschhoffs have been "very happy" with how
that company has been run.
"There are no plans for an IPO. In terms of additional
acquisitions, The Maschhoffs are always looking for other
acquisition opportunities that make business sense," Sanger
Revenues for The Maschoffs, headquartered in Carlyle,
Illinois, were approximately $736 million in 2012 and should be
roughly $820 million to $825 million in fiscal 2013, Sanger
GNP Company, based in St. Cloud, Minnesota, estimated its
2013 chicken sales at $400 million and has contracts with 350
farms in Minnesota and Wisconsin to produce its birds. GNP was
the 18th-largest U.S. broiler producer in 2012, according to
WATT PoultryUSA rankings.
Successful Farming's ratings for U.S. Pork Powerhouses
listed The Maschhoffs as the fourth biggest U.S. pork producer
in 2013 based on its sow herd of 208,000.
(Editing by Bob Burgdorfer)