July 18, 2011
AgFeed Industries seeks to buy Kansas City meat processor
AgFeed Industries, a China-based hog production and processing firm, announced it has signed separate non-binding letters of intent to obtain Pine Ridge Farms, LLC and Kansas City Sausage Company, LLC.
It is expected that the combined businesses will add over US$180 million of annualised revenue and over US$13 million of EBITDA to the Company's results.
"These acquisitions represent AgFeed's entry into the harvest and processing segment of the pork business and will provide the base of human resources necessary to expand this business and develop this segment of our business as an adjunct to the western-style hog farms under development in China. This processing capability is the necessary precursor to the Company's global market strategy," the company said in a news release.
Des Moines, Iowa-based Pine Ridge Farms is a specialty hog processing facility established in January 2004. It has processing capacity of over 3,000 animals per day. Currently PRF is processing approximately 1,850 sows/boars and 1,150 butcher hogs. PRF manufactures pre-rigor for sausage, fresh and frozen pork products, and private label products.
Kansas City Sausage is a private-label sausage company that started operations in late 2009. It sells products domestically and exports products to Canada, Mexico, the Caribbean and the Pacific Rim.
AgFeed Industries also announced executive promotions and reassignments as well the addition of a new independent director.
The company appointed current board member board K. Ivan Gothner, as vice chairman to work alongside Chairman John Stadler. In addition, Glenn McClelland, the current president and CEO of the company's US- based hog production business, M2P2, has been appointed the company's Chief Operating officer, while Clay Marshall, the current chief financial officer of M2P2, has been appointed the company's CFO.
The board also appointed David Michael Johnson as a director. Johnson is currently the president and CEO of Cattlco, LLC, which is among the 25 largest cattle feeding operations in the US.