- JBS subsidiary Pilgrim's Pride announced it will acquire GNP Company, a Midwest-based premium branded chicken provider, for an all-cash amount of $350 million, according to a news release.
- GNP offers Pilgrim's its state-of-the-art, innovative technologies such as gas stunning, aeroscalding and automated deboning, in addition to an expanded presence in geographical regions where Pilgrim's didn't previously appear.
- The company expects to close the deal during the first quarter of 2017, pending regulatory review and approval and customary closing conditions.
The GNP acquisition also enables Pilgrim's to expand its no-antibiotics-ever and organic lines of better-for-you chicken products. Between portfolio expansion, technology adoption and increased efficiency, the GNP acquisition could arguably offer Pilgrim's as many benefits as Pilgrim's could provide to GNP.
The chicken portfolio expansion could be particularly valuable as GNP provides fast-growing and higher-margin chicken products. It's unclear how the Georgia Dock controversy might impact those chicken prices, especially because poultry costs may differ between Pilgrim's foodservice versus grocery retail customers.
Regardless of pricing adjustments, Pilgrim's expects GNP to boost its diluted earnings per share next year. By improving Pilgrim's top and bottom lines, this acquisition could improve cash flow and shareholder confidence to better the chances of more acquisitions in the near future.