GNP Co., the St. Cloud-based maker of Gold'n Plump and Just Bare chicken products, is being bought by rival Pilgrim's Pride Corp. for $350 million.
Pilgrim's Pride, based in Greeley, Colo., said it will pay cash for GNP, the largest chicken producer in the Midwest, in a deal expected to close next year.
JBS S.A., based in Brazil, the world's largest meat processor by sales, is majority owner of Pilgrim's.
The purchase expands Pilgrim's geographic footprint as well as its natural and organic offerings, which GNP has accelerated in recent years. This summer, GNP announced plans to ween all of its chickens entirely off antibiotic use within the next four years.
"The Pilgrim's team is excited to combine the collective strengths of Pilgrim's Pride and GNP Company," Bill Lovette, Pilgrim's Pride chief executive, said in a statement. "GNP Company boasts outstanding state-of-the-art assets in geographic areas where Pilgrim's is not currently present, providing Pilgrim's the opportunity to expand our production and customer bases, while maintaining our high standards for quality service and great-tasting products."
It wasn't immediately clear what the deal will mean for GNP's production facilities in Cold Spring and Luverne, Minn., and Arcadia, Wis. GNP relies on about 400 family farms and employs more than 1,700 workers. GNP declined to comment. Pilgrim's Pride said it was too early to comment about specific plans for operations.
Pilgrim's processes nearly 142 million pounds of chicken a week, making it the second-largest chicken producer in the U.S., according to PoultryUSA. GNP ranks No. 19 in the U.S., processing just under 9 million pounds of chicken weekly. Tyson Foods, based in Springdale, Ark., is the nation's largest chicken producer, processing more than 175 million pounds a week.
The transaction is the second time Gold'n Plump has been sold in the last three years. Founded as a hatchery by E.M. Helgeson in 1926, the firm was owned by Helgeson descendants until 2013, when they sold it to the Maschhoffs LLC, one of the nation's largest hog producers, for an undisclosed sum.
At the time, Maschhoffs was aiming to diversify beyond pork, while GNP was looking for money to grow. The Maschhoffs spent $35 million to expand the Cold Spring facility and were planning another update that would cost $45 million.
Pilgrim's Pride said it was attracted to GNP for its technologies, such as automated deboning and gas stunning, which is meant to reduce the birds' stress levels before killing.
Pilgrim's expects to capture about $28 million in tax savings and improve cash-flow capabilities. The Colorado company employs more than 38,200 people with processing and prepared-foods plants in 12 states, Puerto Rico and Mexico.