By: Tenderloin $$$$
Reply To: None
Monday, 2 Oct 2000 at 12:42 PM EDT
Post 158542 of 160344
A little more IBP info
Meat producer IBP to be bought by investor group
By Brad Dorfman
largest producer of fresh beef, pork and related products, has agreed to a $2.4 billion buyout by an investment fund affiliated with investment bank Donaldson, Lufkin & Jenrette, DLJ said Monday.
The deal calls for all shares of Dakota Dunes, South Dakota-based IBP to be purchased for $22.25 in cash. There are currently about 106 million shares of IBP common stock outstanding.
Rawhide Holdings Corp., an affiliate of private equity fund DLJ Merchant Banking Partners III LP, will also assume about $1.4 billion in debt.
Shares of IBP, which had been under pressure along with other meat processors, rallied $3-4/16 or 17.75 percent to $21-9/16 Monday. The stock had traded as low as $11 in March after rising to about $29 in December, 1998.
``We've seen this segment suffer for a couple of years,'' Patrick Schumann, food industry analyst at Edward Jones, said, adding that there could be other deals in the industry. ``I would expect there to be some talk on successful exit strategies or some talk on changes of ownership because they (processor stocks) remain depressed.''
IBP has more than 60 production sites in North America, and joint venture operations in China, Ireland, and Russia. The 40-year-old company had sales of $14.1 billion in 1999 and employed 49,000 people.
IBP is also the largest U.S. exporter of red meat and operates sales offices in England, Japan, Taiwan, China, Korea, Russia and Mexico.
With the deal expected to close in early 2001, DLJ Merchant Banking Partners and affiliated funds would become the majority owner of IBP. Other investors include agribusiness giant Archer Daniels Midland Co. (ADM.N), Booth Creek Partners and some IBP managers.
IBP management will remain in place following the deal, the companies said. No changes in operations or staffing are expected. IBP is a leading producer of fresh beef and pork.
IBP began as Iowa Beef Packers Inc. in l961 with a single plant at Denison, Iowa. The plant was one of the first to be near large livestock producing areas, rather than near stockyards in large cities like Chicago and Omaha.
IBP's facilities became more than just slaughterhouses. They were automated meat factories producing more than 350 byproducts such as hides and tallow.
``Virtually nothing from the processed animal is left to waste,'' IBP has said.
The deal comes a little bit more than a month after a regulatory filing showed that rival processor Smithfield Foods Inc. (SFD.N) had accumulated a 6.3 percent stake in IBP.
Smithfield is ``studying the situation,'' regarding whether to keep or sell its stake, Jerry Hostetter, director of investor relations, said.
Cheers
Voluntary Disclosure: Strong Buy : Long and Short Term
Cheers
Voluntary Disclosure: Strong Buy : Long and Short Term
