Tyson Foods Inc. (NYSE: TSN) announced early on Monday that it had reached a definitive agreement to acquire the Keystone Foods business from Marfrig Global Foods. The transaction is all in cash and is valued at $2.16 billion. The deal is expected to close in mid-fiscal 2019.
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 value-added protein capabilities. Keystone supplies chicken, beef, fish and pork to some of the world’s leading quick-service restaurant chains, as well as retail and convenience store channels.
The acquisition includes six processing plants and an innovation center in the United States, with locations in Alabama, Georgia, Kentucky, North Carolina, Pennsylvania and Wisconsin. (It does not include the beef patty processing plant in Ohio.) It also includes eight plants and three innovation centers in China, South Korea, Malaysia, Thailand and Australia.
Keystone employs roughly 11,000 people. It generated revenue of $2.5 billion and adjusted EBITDA of $211 million in the 12 months ending June 30, 2018. Tyson Foods has a market cap of about $23 billion.
Tyson Foods expects the acquisition to be accretive to adjusted earnings per share in the first year, excluding transaction-related costs. It also expects to generate annual synergies of about $50 million by the third year of the acquisition.
Tom Hayes, president and CEO of Tyson Foods, commented:
Keystone is a leading global protein company and will be a great addition to Tyson Foods. This acquisition will expand our international presence and value-added production capabilities and help us deliver more value to our foodservice customers. Keystone provides a significant foundation for international growth with its in-country operations, sales and distribution network in high growth markets in the Asia Pacific region as well as exports to key markets in Europe, the Middle East and Africa. We look forward to serving customers with these additional capabilities and to welcoming Keystone’s dedicated team members to the Tyson Foods family.
Shares of Tyson closed at $62.40 on Friday, with a consensus analyst price target of $71.13 and a 52-week trading range of $56.79 to $84.65.
Take Charge of Your Retirement In Just A Few Minutes (Sponsor)
Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance—and SmartAsset’s simple quiz makes it easier than ever for you to connect with a vetted financial advisor.
Here’s how it works:
- Answer a Few Simple Questions. Tell us a bit about your goals and preferences—it only takes a few minutes!
- Get Matched with Vetted Advisors Our smart tool matches you with up to three pre-screened, vetted advisors who serve your area and are held to a fiduciary standard to act in your best interests. Click here to begin
- Choose Your Fit Review their profiles, schedule an introductory call (or meet in person), and select the advisor who feel is right for you.
Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.