Smithfield Foods Forms JV with Kansas City Sausage
Smithfield Foods, Inc., Smithfield, Va., signed a non-binding letter of intent to form a 50/50 joint venture with Kansas City Sausage Co., LLC, Kansas City, Mo., and its sister company, Pine Ridge Farms, LLC, Greenville, N.Y. The transaction will be funded with cash on hand and is expected to close in the fourth quarter of fiscal 2013, subject to customary closing conditions, including regulatory approvals. Terms of the letter of intent were not disclosed. Smithfield expects the transaction to be immediately accretive to earnings.
"With our strong ongoing focus on building our packaged meats business, and with 15% of the U.S. sow population, this joint venture is a logical fit for Smithfield. It will provide a growth platform in two key packaged meats categories—breakfast sausage and dinner sausage—and will allow us to expand our product offerings to our customers. These categories represent over $4 billion in retail and foodservice sales annually. This is a big opportunity for Smithfield to grow in two categories that have not historically been a focus for the company," says C. Larry Pope, president and CEO of Smithfield.