Carl Buddig and Co, a family-owned US meat processor, has entered into an agreement to acquire struggling BBQ meat group Rupari Food Services.
Rupari said that the sale was a “natural step” for the group, which has been hit by capital structure issues. To facilitate the transaction, Rupari Food Services and its parent, Rupari Holding Corp., filed voluntary petitions for reorganisation under Chapter 11 of the US Bankruptcy Code yesterday (10 April).
Under US bankruptcy regulations, other companies will have an opportunity to submit competing offers for the assets. However, Rupari said the company expects the sale to be completed within 60 to 90 days.
Rupari produces products under brands including Tony Roma’s and Butcher’s Prime as well as retail own label items. In 2016, the group relaunched its Tony Roma’s brand and took what it described as “significant steps toward financial health” by reducing costs, capital expenditures and working capital needs. However, the company said that its efforts were hindered by “legacy financial and structural burdens”.
“We have worked diligently to overcome our capital structure issues, along with legacy legal issues the company has been struggling with for the past few years. We are very pleased with our progress from an operational efficiency standpoint, however, the company still faces liquidity issues,” said Rupari’s CEO Jack Kelly. “After careful review of a wide range of available options, management and the board of directors determined that a sale of the company is in the best interests of all constituents, including our valued customers and employees.”
Buddig CEO Bob Buddig said that the acquisition of Rupari would expand the group’s product offering and its nationwide footprint.
“Acquiring the assets of Rupari makes good business sense for Buddig as we expand our portfolio of fresh, great tasting, and affordable meats. It gives us immediate access to an attractive pre-cooked BBQ segment and allows us to strategically grow our nationwide footprint,” he commented.
Rupari stressed that it has sufficient cash on hand to maintain normal operations during the Chapter 11 process. “During the sale process we will have sufficient financial resources to purchase the goods and services necessary to meet our customers’ needs and continue the high-quality service and support our customers have come to expect from the Rupari team,” Kelly noted.
“Daily operations will continue as usual, production hours will remain the same and all aspects of the business will go on as before the Chapter 11 filing. Our employees will continue to be paid as usual during this transaction.”