Rica Foods, Inc (Amex: RCF) announced today that it has signed a Stock Purchase Agreement (the “Agreement”) to acquire an 80% controlling interest in Industrias Avicolas Integradas, S.A., a Nicaraguan corporation (“INDAVINSA”), in exchange for cash and stock of RCF. The acquisition is structured for RCF to deliver, upon closing, 100,000 shares of its Common Stock along with US $300,000. INDAVINSA is a Nicaraguan company that is in the poultry and animal feed concentrate business.
“Due to its close proximity to Costa Rica, the Nicaraguan market is a natural for the Company’s growth,” Calixto Chaves, Rica’s Chairman and CEO, said today. “It affords RCF the opportunity to continue to build on one of our primary product lines while providing a prime market for further brand penetration, resulting in positive economies of scale,” Mr. Chaves continued. “INDAVINSA possesses a strong animal feed concentrate business, which is one of our main products. Our vision is to identify and pursue companies in this segment that may strengthen our overall poultry and derived products operations,” he concluded.
Upon closing, Rica will own 80% of the total outstanding capital stock of INDAVINSA. INDAVINSA owns both operational animal feed mill plants and land for expansion, which are strategically situated in two important agricultural regions of Nicaragua — Tipitapa and Chinandega. Also INDAVINSA has secured loan agreements to develop its expansion projects. Certain term and conditions are to be finalized upon closing, which is scheduled for December 1, 2000.
RCF is the parent Company of the largest poultry producers in Costa Rica. The Company owns Corporacion Pipasa, S.A. and Corporacion As de Oros, S.A., which control approximately 70% of the total Costa Rican poultry market. RCF’s subsidiaries promote and market the brand names of Pipasa, As de Oros, Aguilar y Solis, Kimby, Mimados, Nutribel, Supremo, Kanin, Ascan and Chulitas in Costa Rica and Central America. Pipasa is considered one of the most recognized leaders in Central American chicken production, reaching agreements to supply poultry products in Costa Rica to Burger King, Pizza Hut, Price Smart, Subway, KFC, Gerber Products, and to McDonald’s restaurants in Central America.
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties or other factors which may cause actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. For more complete information concerning factors that could affect the Company’s results, reference is made to the Company’s registration statements, reports, or other documents filed with the Securities and Exchange Commission.
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