Smithfield Foods, Inc. (NYSE: SFD) today announced the closing of its purchase of approximately 13 million shares or 50 percent of the outstanding common shares of Pinnacle Foods, Inc. (OTC Bulletin Board: PFOD) for $6 million.
This is Smithfield Foods’ second transaction in the last week to accelerate its case-ready business in the Northeast. Smithfield will combine its distribution capabilities with Pinnacle and recently-acquired Moyer Packing Company to offer better service and a greater variety of pre-priced, pre-packaged case-ready products to food retailers. Pinnacle produces pork, beef, lamb and veal; Moyer is a beef processor. Pinnacle and Moyer are based in Pennsylvania.
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Pinnacle expects sales of about $60 million this year. The agreement also calls for Smithfield Foods to provide a $30 million revolving line of credit to Pinnacle for working capital and other purposes.
A leader in the case-ready market, Smithfield Foods sold about 75 million pounds of case-ready pork to food retailers in fiscal 2001, more than three times the volume of the prior year.
Smithfield Foods has delivered a 28 percent average annual compounded rate of return to investors since 1975. In the last 15 years, the company’s share price has outperformed the S&P 500 Index by more than 350 percent. With fiscal 2001 sales of $6 billion, Smithfield Foods is the leading processor and marketer of fresh pork and processed meats in the United States, as well as the largest producer of hogs. For more information, please visit http://www.smithfieldfoods.com.
This news release may contain “forward-looking” information within the meaning of the federal securities laws. The forward-looking information may include statements concerning the Company’s outlook for the future, as well as other statements of beliefs, future plans and strategies or anticipated events, and similar expressions concerning matters that are not historical facts. The forward-looking information and statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, the statements. These risks and uncertainties include availability and prices of live hogs, raw materials and supplies, live hog production costs, product pricing, the competitive environment and related market conditions, operating efficiencies, access to capital, the cost of compliance with environmental and health standards, adverse results from ongoing litigation and actions of domestic and foreign governments.
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