We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Tyson Foods Prices Tender Offer for AdvancePierre Buyout
Read MoreHide Full Article
Tyson Foods, Inc. (TSN - Free Report) has agreed to sell its notes offering, in order to finance the previously announced acquisition of AdvancePierre Foods Holdings, Inc.
The company will sell $300 million aggregate principal amount of its Floating Rate Senior Notes due 2019, $350 million aggregate principal amount of the 2020 notes, $1,350 million aggregate principal amount of the 2027 notes and $750 million aggregate principal amount of its 2047 notes in underwritten public offerings. The offerings are expected to close on Jun 2, 2017. The proceeds, along with cash in hand, borrowings under new term loans and the issuance of commercial paper or commercial notes are intended to finance the acquisition of AdvancePierre Foods, which includes repayment of full AdvancePierre’s outstanding 5.50% senior notes due 2024 and AdvancePierre’s outstanding first lien term loan, as well as some other payments.
Last month, Tyson Foods has agreed to acquire all the outstanding shares of AdvancePierre Foods for approximately $4.2 billion. Tyson Foods expects the transaction to generate cost synergies of approximately $200 million within three years. The acquisition will provide an attractive current premium to AdvancePierre shareholders and will enable Tyson Foods to grow in the fastest growing portfolio of protein packed brands. AdvancePierre is a leading national producer of ready-to-eat lunch and dinner sandwiches, sandwich components and snacks, with product categories that are complementary to Tyson Foods’ current offerings. Further, AdvancePierre’s product portfolio will help Tyson Foods to expand its fresh prepared foods offering for both out-of-home and in-home eating occasions.
We note that the company is planning to reduce costs across the Prepared Foods portfolio by restructuring its manufacturing network. Tyson Foods is also focusing on expanding its protein-packed brands as it seeks to acquire AdvancePierre, divest non-protein businesses, and focus on growth categories and growth channels. The company also announced its intention to sell three non-protein businesses, Sara Lee Frozen Bakery, Kettle and Van’s, which are all part of its Prepared Foods segment. The move is in sync with its strategic focus on protein-packed brands.
Tyson Foods, Inc. Price, Consensus and EPS Surprise
However, the company is currently facing volume declines and increased costs in the foodservice Prepared Foods business. It has thus lowered its expectations for the year to 9% return on sales for the segment. The company expects the same to return to normalized range within fiscal 2018.
Tyson Foods’ Beef segment’s performance has been dismal of late. Higher domestic availability of fed cattle supplies and lower livestock costs led to the sluggishness in the segment. The company has also decided to reduce its beef production capacity due to lower cattle supply. In fiscal 2017, the company expects fed cattle supplies to increase 6% to 7% as compared to fiscal 2016.
We note that Tyson Foods’ stock inched up 0.2% in the past six months,compared with the Food-Meat Products industry, which gained 5.5%. Notably, the industry is part of the top 42% of the Zacks Classified industries (112 out of the 265). The broader Consumer Staples sector is placed at bottom 19% of the Zacks Classified sectors (13 out of 16).
Tyson Foods currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the broader consumer staples sector include SunOpta Inc. (STKL - Free Report) , Aramark (ARMK - Free Report) and Inter Parfums, Inc. (IPAR - Free Report) .
Aramark carries a Zacks Rank #2 (Buy) and has a long-term earnings growth rate of 12.8%.
Inter Parfums, a Zacks Rank #2 stock has a long-term earnings growth rate of 12.0%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Tyson Foods Prices Tender Offer for AdvancePierre Buyout
Tyson Foods, Inc. (TSN - Free Report) has agreed to sell its notes offering, in order to finance the previously announced acquisition of AdvancePierre Foods Holdings, Inc.
The company will sell $300 million aggregate principal amount of its Floating Rate Senior Notes due 2019, $350 million aggregate principal amount of the 2020 notes, $1,350 million aggregate principal amount of the 2027 notes and $750 million aggregate principal amount of its 2047 notes in underwritten public offerings. The offerings are expected to close on Jun 2, 2017. The proceeds, along with cash in hand, borrowings under new term loans and the issuance of commercial paper or commercial notes are intended to finance the acquisition of AdvancePierre Foods, which includes repayment of full AdvancePierre’s outstanding 5.50% senior notes due 2024 and AdvancePierre’s outstanding first lien term loan, as well as some other payments.
Last month, Tyson Foods has agreed to acquire all the outstanding shares of AdvancePierre Foods for approximately $4.2 billion. Tyson Foods expects the transaction to generate cost synergies of approximately $200 million within three years. The acquisition will provide an attractive current premium to AdvancePierre shareholders and will enable Tyson Foods to grow in the fastest growing portfolio of protein packed brands. AdvancePierre is a leading national producer of ready-to-eat lunch and dinner sandwiches, sandwich components and snacks, with product categories that are complementary to Tyson Foods’ current offerings. Further, AdvancePierre’s product portfolio will help Tyson Foods to expand its fresh prepared foods offering for both out-of-home and in-home eating occasions.
We note that the company is planning to reduce costs across the Prepared Foods portfolio by restructuring its manufacturing network. Tyson Foods is also focusing on expanding its protein-packed brands as it seeks to acquire AdvancePierre, divest non-protein businesses, and focus on growth categories and growth channels. The company also announced its intention to sell three non-protein businesses, Sara Lee Frozen Bakery, Kettle and Van’s, which are all part of its Prepared Foods segment. The move is in sync with its strategic focus on protein-packed brands.
Tyson Foods, Inc. Price, Consensus and EPS Surprise
Tyson Foods, Inc. Price, Consensus and EPS Surprise | Tyson Foods, Inc. Quote
However, the company is currently facing volume declines and increased costs in the foodservice Prepared Foods business. It has thus lowered its expectations for the year to 9% return on sales for the segment. The company expects the same to return to normalized range within fiscal 2018.
Tyson Foods’ Beef segment’s performance has been dismal of late. Higher domestic availability of fed cattle supplies and lower livestock costs led to the sluggishness in the segment. The company has also decided to reduce its beef production capacity due to lower cattle supply. In fiscal 2017, the company expects fed cattle supplies to increase 6% to 7% as compared to fiscal 2016.
We note that Tyson Foods’ stock inched up 0.2% in the past six months,compared with the Food-Meat Products industry, which gained 5.5%. Notably, the industry is part of the top 42% of the Zacks Classified industries (112 out of the 265). The broader Consumer Staples sector is placed at bottom 19% of the Zacks Classified sectors (13 out of 16).
Tyson Foods currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the broader consumer staples sector include SunOpta Inc. (STKL - Free Report) , Aramark (ARMK - Free Report) and Inter Parfums, Inc. (IPAR - Free Report) .
SunOpta, with a long-term earnings growth rate of 15% currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Aramark carries a Zacks Rank #2 (Buy) and has a long-term earnings growth rate of 12.8%.
Inter Parfums, a Zacks Rank #2 stock has a long-term earnings growth rate of 12.0%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>