Tyson Foods Inc. on Aug. 20 revealed an agreement to buy Keystone Foods, a major supplier to foodservice customers, from Marfrig Global Foods for $2.16 billion in cash.
Headquartered in West Chester, Pa., 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. McDonald's was among its top clients. Its product portfolio includes chicken nuggets, wings and tenders; beef patties; and breaded fish fillets.
The acquisition includes six processing plants and an innovation center in the U.S. and eight plants and three innovation centers in China, South Korea, Malaysia, Thailand and Australia. U.S. plants are in Alabama, Georgia, Kentucky, North Carolina, Pennsylvania and Wisconsin. The deal does not include a beef patty-making plant in Ohio.
Keystone has been owned by Brazilian food company Marfrig since 2010, which has been publicly shopping the company since earlier this year. Just a month or so ago, Marfrig bought a 51 percent interest in National Beef Packing Co. for $969 million, making the Brazilian company the second largest beef processor in the world – after fellow Brazilian company JBS.
A Reuters story said other parties bidding on Keystone included Cargill Inc., Cofco Corp., China Investment Corp. and George's Inc., a family-owned chicken producer in Springdale, Ark.
Interestingly, the president of Keystone USA is William Griffith, who spent 10 years in food safety at Tyson. He replaced as Keystone president Devin Cole, who was Tyson's chief commercial officer.
“Keystone is a leading global protein company and will be a great addition to Tyson Foods,” said Tom Hayes, president/CEO of 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."
Keystone employed approximately 11,000 people, generated annual revenue of $2.5 billion and had earnings of $211 million in the 12 months ending June 30. 65 percent of its revenue came from U.S.-based production and the remaining 35 percent from its Asia Pacific plants.
The transaction, which has been approved by Tyson Foods’ board of directors, is expected to close early next year.