MINNEAPOLIS and NEW YORK and LAUREL,
Miss., Aug. 9, 2021
/PRNewswire/ -- Cargill, Continental Grain Company, and
Sanderson Farms, Inc. (NASDAQ: SAFM) announced today they have
reached a definitive agreement for a joint venture between Cargill
and Continental Grain to acquire Sanderson Farms for $203 per share in cash, representing a total
equity value for Sanderson Farms of $4.53
billion. The purchase price represents a 30.3% premium to
Sanderson Farms' unaffected share price of $155.74 on June 18,
2021, the last full trading day prior to media speculation
about the potential sale of Sanderson Farms; a 22.8% premium to the
Sanderson Farms 30-day volume weighted average price ("VWAP") as of
June 18, 2021, and a 15.2% premium to
the all-time high share price as of June 18,
2021. Upon completion of the transaction, Cargill and
Continental Grain will combine Sanderson Farms with Wayne Farms, a
subsidiary of Continental Grain, to form a new, privately held
poultry business.
The combination of Sanderson Farms and Wayne Farms will create a
best-in-class U.S. poultry company with a high-quality asset base,
complementary operating cultures, and an industry-leading
management team and workforce. The new company will be well
positioned to enhance its service to customers across retail and
food service and drive organic growth in an industry fueled by
affordability and key consumer trends around the health,
sustainability, and versatility of chicken.
"Since my grandfather founded Sanderson Farms 75 years ago, our
many significant achievements have been driven by our commitment to
providing the very best chicken products in a profitable manner
that benefits each of the constituents who contribute to our
success. This transaction is the culmination of that commitment, as
it delivers a significant value to our stockholders, reflecting the
dedication of our team, and our best-in-class assets, quality
products, efficient and sustainable operations, and respected
brand," said Joe Sanderson, Chairman
and Chief Executive Officer of Sanderson Farms, Inc. "We are proud
to be joining with Cargill and Continental Grain and we are
confident that they will be strong stewards of the Sanderson Farms
team, brand and assets going forward. As part of the newly created
company, Sanderson Farms and its new owners will remain committed
to the employees, poultry producers, customers, communities,
environment, and animals under our care, and to continuing to
deliver the highest quality products and the best service in our
industry to our customers."
"We are very happy to partner with Cargill with whom we have had
a decades-long relationship between two family-owned companies.
Sanderson Farms' operations, best-in-class assets and valuable
brand have underscored their success, and we have the highest
respect for Joe Sanderson, and the
business and team he has built as the third generation CEO," said
Paul Fribourg, Chairman and CEO of
Continental Grain. "Wayne Farms has been one of the most important
and successful parts of Continental Grain for almost 60 years, so
bringing together two great partners with two great poultry
companies will ensure good things for our customers, our grower
partners, and our employees."
The new company will have state-of-the-art operations and will
continue to invest in its workforce and in employee safety.
Operations will include poultry processing plants and prepared
foods plants across Alabama,
Arkansas, Georgia, Louisiana, Mississippi, North
Carolina, and Texas.
"At Cargill, we are committed to nourishing the world in a safe,
responsible and sustainable way," said David MacLennan, Chairman and CEO of Cargill.
"Expanding our poultry offerings to the U.S. is a key enabler of
our ability to meet customer and consumer demands. With these great
businesses, and our strong partnership, we believe we will deliver
a superior portfolio of products and services to our
customers."
Cargill expects to support the new joint venture with its
longstanding relationships with retail and foodservice customers.
Wayne Farms, part of Continental Grain's food, agriculture and
commodities investment portfolio since 1965, has roots in the
poultry industry that go back more than a century.
PARTNERING WITH FARMERS AND COMMUNITIES
Cargill, Continental Grain, and Sanderson Farms are committed to
ensuring operational excellence, workplace safety, and the highest
quality of product for the U.S. poultry industry.
Cargill and Continental Grain have long histories of investing
and partnering with American farmers and are dedicated to
strengthening the food and agriculture industries for the benefit
of consumers and growers. Their shared culture, built on the
principles of supporting farmers and communities, complements
Sanderson Farms' reputation as one of the industry's most respected
operators. Sanderson Farms' strong brand, reputation, and
best-in-class assets will remain a core part of the combined
company. In addition, Wayne Farms' deep customer relationships
across the food service sector complement Sanderson Farms' diverse
grocery and retail relationships.
TRANSACTION DETAILS
The transaction is expected to close by the end of 2021 or early
2022, and will be subject to regulatory and Sanderson Farms
stockholder approval, and other customary closing conditions.
The acquisition consortium has committed equity and debt
financing in place to complete the transaction.
Wayne Farms CEO Clint Rivers will
lead the combined company.
Upon the completion of the transaction, Sanderson Farms will
become a private company, and its shares will no longer be traded
on NASDAQ.
BofA Securities acted as the financial advisor to Cargill and
Freshfields Bruckhaus Deringer (US) LLP acted as legal counsel.
Gibson Dunn & Crutcher acted as tax counsel.
Centerview Partners LLC acted as financial advisor to Sanderson
Farms and Wachtell Lipton Rosen & Katz and Fishman Haygood LLP
acted as legal counsel.
Lazard acted as the financial advisor for Wayne Farms and
Continental Grain, and Paul, Weiss, Rifkind, Wharton & Garrison
LLP acted as legal counsel.
About Sanderson Farms
Sanderson Farms, Inc. is engaged
in the production, processing, marketing and distribution of fresh,
frozen and minimally prepared chicken. Its shares trade on the
NASDAQ Global Select Market under the symbol SAFM.
About Cargill
Cargill's 155,000 employees across 70
countries work relentlessly to achieve our purpose of nourishing
the world in a safe, responsible and sustainable way. Every day, we
connect farmers with markets, customers with ingredients, and
people and animals with the food they need to thrive. We combine
156 years of experience with new technologies and insights to serve
as a trusted partner for food, agriculture, financial and
industrial customers in more than 125 countries. Side-by-side, we
are building a stronger, sustainable future for agriculture.
About Continental Grain Company
Conti is a privately
owned global investor, owner and operator of companies with more
than 200 years of history across the food and agribusiness
spectrum. It creates long–term value by applying deep industry
knowledge, capital and talent to businesses ranging from
established market leaders to promising innovators.
Conti builds platforms that leverage its strategic expertise in
food production, processing, and distribution to source proprietary
deals, working alongside trusted partners and supporting strong
management teams. It brings a long–term ownership mindset,
concentrating on investment and operating plans that create
enduring value and a sustainable, efficient and nutritional food
supply chain. Conti brings people, ideas and resources together to
build the businesses that will feed the world.
About Wayne Farms
Wayne Farms LLC is a vertically
integrated U.S. poultry producer. A subsidiary of Continental Grain
Company, Wayne Farms owns and operates fresh and further-processed
facilities throughout the Southeast, and employs more than 9,000
individuals. Producing products under the brand names of
WAYNE FARMS® fresh and prepared
chicken; PLATINUM HARVEST® premium fresh chicken; CHEF'S CRAFT®
gourmet chicken; NAKED TRUTH® premium chicken; and LADYBIRD™
premium chicken, Wayne Farms has a well-known history of operating
humane, safe, industry-leading poultry processing facilities and
delivering exceptional products to some of the largest industrial,
institutional, and foodservice companies across the globe.
Cautionary Statement Regarding Forward-Looking
Statements
This communication includes forward-looking
statements within the meaning of the "safe harbor" provisions of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements are based on a number of assumptions
about future events and are subject to various risks, uncertainties
and other factors that may cause actual results to differ
materially from the views, beliefs, projections and estimates
expressed in such statements. These risks, uncertainties and other
factors include, but are not limited to, those discussed under
"Risk Factors" in the Annual Report on Form 10-K for the fiscal
year ended October 31, 2020 and
Quarterly Report on Form 10-Q for the quarter ended April 30, 2021 of Sanderson Farms, Inc. (the
"Company"), and the following: (1) the timing, receipt and terms
and conditions of any required governmental or regulatory approvals
of the proposed transaction and the related transactions involving
affiliates of Cargill and Continental Grain that could reduce the
anticipated benefits of or cause the parties to abandon the
proposed transaction; (2) risks related to the satisfaction of the
conditions to closing the proposed transaction (including the
failure to obtain necessary regulatory approvals or the approval of
the Company's stockholders) , and the related transactions
involving affiliates of Cargill and Continental Grain, in the
anticipated timeframe or at all; (3) the risk that any
announcements relating to the proposed transaction could have
adverse effects on the market price of the Company's common stock;
(4) disruption from the proposed transaction making it more
difficult to maintain business and operational relationships; (5)
the occurrence of any event, change or other circumstances that
could give rise to the termination of the merger agreement entered
into pursuant to the proposed transaction or of the transactions
involving affiliates of Cargill and Continental Grain; (6) risks
related to disruption of management's attention from the Company's
ongoing business operations due to the proposed transaction; (7)
disruption from the proposed transaction making it difficult to
maintain business and operational relationships, including
retaining and hiring key personnel and maintaining relationships
with the Company's customers, vendors and others with whom it does
business; (8) significant transaction costs; (9) the risk of
litigation and/or regulatory actions related to the proposed
transaction or unfavorable results from currently pending
litigation and proceedings or litigation and proceedings that could
arise in the future; (10) other business effects, including the
effects of industry, market, economic, political or regulatory
conditions; (11) information technology system failures, data
security breaches, data privacy compliance, network disruptions,
and cybersecurity, malware or ransomware attacks; (12) changes
resulting from the COVID-19 pandemic, which could exacerbate any of
the risks described above, and could include: high absentee rates
that have prevented and may continue to prevent the Company from
running some of its facilities at full capacity, or could in the
future cause facility closures; (13) an inability of contract
poultry producers to manage their flocks; (14) supply chain
disruptions for feed grains; (15) further changes in customer
orders due to shifting consumer patterns; (16) disruptions in
logistics and the distribution chain for the Company's products;
(17) liquidity challenges; and (18) a continued or worsening
decline in global commercial activity, among other unfavorable
conditions.
Readers are cautioned not to place undue reliance on
forward-looking statements made by or on behalf of the Company.
Each such statement speaks only as of the day it was made. The
Company undertakes no obligation to update or to revise any
forward-looking statements. The factors described above cannot be
controlled by the Company. When used in this communication, the
words "believes," "estimates," "plans," "expects," "should,"
"could," "outlook," and "anticipates" and similar expressions as
they relate to the Company or its management are intended to
identify forward looking statements. Forward-looking statements in
this press release may include, without limitation: statements
about the potential benefits of the proposed acquisition,
anticipated growth rates, the Company's plans, objectives,
expectations, and the anticipated timing of closing the proposed
transaction.
Additional Information and Where to Find It
In
connection with the proposed transaction, the Company will file
relevant materials with the U.S. Securities and Exchange Commission
(the "SEC"), including the Company's proxy statement on Schedule
14A (the "Proxy Statement"). The Company plans to mail to its
stockholders a definitive Proxy Statement in connection with the
proposed transaction. THE COMPANY URGES YOU TO READ THE PROXY
STATEMENT AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH
THE SEC CAREFULLY AS THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE PROPOSED
TRANSACTION AND RELATED MATTERS. Investors will be able to obtain a
free copy of the Proxy Statement and other related documents (when
available) filed by the Company with the SEC at the website
maintained by the SEC at www.sec.gov. Investors also will be able
to obtain a free copy of the Proxy Statement and other documents
(when available) filed by the Company with the SEC by accessing the
Investor Relations section of the Company's website at
http://sandersonfarms.com.
Participants in the Solicitation
The Company and
certain of its directors, executive officers and employees may be
considered to be participants in the solicitation of proxies from
the Company's stockholders in connection with the proposed
transaction. Information regarding the persons who may, under the
rules of the SEC, be deemed participants in the solicitation of the
stockholders of the Company in connection with the proposed
transaction, including a description of their respective direct or
indirect interests, by security holdings or otherwise will be
included in the Proxy Statement when it is filed with the SEC. You
may also find additional information about the Company's directors
and executive officers in the Company's proxy statement for its
2021 annual meeting of stockholders, which was filed with the SEC
on January 14, 2021 and in
subsequently filed Current Reports on Form 8-K and Quarterly
Reports on Form 10-Q. You can obtain free copies of these documents
from the Company using the contact information above.
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SOURCE Cargill, Inc.
