Tyson Foods has finalized its acquisition of Tennessee-based Williams Sausage Company as the meat giant continues its strategy of diversifying its portfolio despite recent losses.
Williams Sausage Company makes fresh and fully cooked sausage, bacon and sandwiches for retail and food service companies and employs about 500 workers. The terms of the sale were not released but according to a recent 10-Q filing with the Securities and Exchange Commission, Tyson expects to spend between $200 million and $250 million on the deal.
During a recent call with analysts to discuss Tyson's second quarter earnings results, Stewart Glendinning, group president of Tyson's prepared foods division, said Williams Sausage has great facilities and great brands that will fit in well with Tyson.
"First, there are capabilities we're going to have because right now, most of our stock harvest goes through a single facility. This is going to provide some redundancy that makes sense for our business, particularly because Jimmy Dean is so important to the portfolio," Glendinning said. "And then, second, when you look at the brands that are going to be complementary to our brands, along with a DSD (direct store delivery) network that, frankly, we haven't had in our portfolio before, I think we're setting up for a very interesting deal here that is going to be a good addition to Tyson."
Tyson has struggled in recent quarters with top executives saying all three of the company's meat segments -- chicken, pork and beef -- are facing economic challenges. Earlier this month, Tyson reported a surprise second quarter loss of $97 million, with revenue nearly flat at $13.3 billion. Its stock plummeted 16% on the news and moved even lower before beginning to trend upward.
On Tuesday, shares closed at $51.67, up $1.56, or more than 3%, in trading on the New York Stock Exchange. Shares have traded as low as $47.11 and as high as $92.32 over the past year.
In the last six months or so Tyson has lost or shuffled executives in key positions. The company closed two poultry plants in May, one in Van Buren that employed about 950 and another in Virginia with nearly 700 workers, as it tries to improve operating efficiency. In April, Tyson said it would cut 10% of its corporate jobs and reduce senior leadership roles by 15%.
Tyson first announced the plan to acquire Williams Sausage Company in February. Emily Billingsley, Roger Williams' daughter, will be responsible for operations of Williams Sausage Company as it comes into the Tyson fold.
"We're grateful to find a new partner in Tyson Foods, a company that understands the important legacy of family businesses and is committed to supporting a smooth transition for all stakeholders," Williams Sausage Company President and Chief Executive Officer Roger Williams said in a statement.