Tyson Foods to Acquire Foodservice Supplier Keystone Foods

Press enter to search
Close search
Open Menu

Tyson Foods to Acquire Foodservice Supplier Keystone Foods

08/21/2018
Tyson Foods logo

SPRINGDALE, Ark. — Tyson Foods Inc. is acquiring Keystone Foods for $2.16 billion in cash from Marfrig Global Foods.

The purchase of Keystone, a major supplier to the growing global foodservice industry, is Tyson Foods' latest investment in its growth strategy and expansion of its value-added protein capabilities, according to the company.

The deal includes six processing plants and an innovation center with locations in Alabama, Georgia, Kentucky, North Carolina, Pennsylvania and Wisconsin, as well as eight plants and three innovation centers in China, South Korea, Malaysia, Thailand and Australia. It does not include a beef patty processing plant in Ohio.

West Chester, Pa.-based Keystone supplies chicken, beef, fish and pork to quick-service restaurant chains as well as to the convenience store and retail channels. Its value-added product portfolio includes chicken nuggets, wings and tenders, beef patties and breaded fish fillets.

"Keystone is a leading global protein company and will be a great addition to Tyson Foods," said Tyson Foods President and CEO Tom Hayes. "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. We look forward to serving customers with these additional capabilities and to welcoming Keystone's dedicated team members to the Tyson Foods family," he added.

Keystone generated annual revenue of $2.5 billion and adjusted EBITDA of $211 million during the 12 months ending June 30, 2018, excluding non-controlling interest and other adjustments. Tyson expects the acquisition to generate annual synergies of approximately $50 million by the third year of the acquisition, driven by operational efficiencies, procurement savings, distribution and supply network optimization and other opportunities.

Tyson Foods also announced that it will sell its pizza crust business to an affiliate of private equity firm Peak Rock Capital. Terms of the deal were not disclosed.

The sale includes TNT Crust, which produces partially-baked and self-rising pizza crusts for frozen pizza manufacturers and foodservice customers. The 400-plus employees of the two manufacturing facilities in Green Bay, Wis., are expected to remain with the company under its new owner.

"TNT Crust is a solid business supported by a great team, however, our strategy is focused on expanding Tyson Foods' leadership position in protein," said Sally Grimes, group president, prepared foods. "We're pleased Peak Rock Capital plans to continue operating the business and provide continued opportunities for the workforce. We intend to work closely with them to ensure a smooth ownership transition for everyone, including our team members and customers."

Other Tyson divestments include the recently completed sale of its Sara Lee Frozen Bakery and Van's businesses to private equity firm Kohlberg & Company.

Goldman, Sachs & Co. is acting as Tyson Foods' financial adviser on the sale. The companies hope to complete the deal in September.