JCG Foods LLC, an affiliate of Koch Foods, was the successful bidder for substantially all the assets of Cagle’s Inc. at an auction that was held on May 10. Cagle’s won court approval to sell its assets for about $93 million. U.S. Bankruptcy Judge Joyce Bihary approved the sale to JCG, which is owned by Joe Grendys, chief exeuctive officer and owner of the Park Ridge, Illinois-based Koch Foods, according to court documents filed May 11 in Atlanta, where Cagle’s is based.
“It’s a very, very natural fit for us,” Grendys said. The acquisition “strategically gives us more chickens to market, their sales are complementary to our current sales base, and it gives us the ability to expand within our own customer base and sell more products with more volume to our current customers and new customers,” he said. The deal still needs the approval of the Justice Department, he noted, but “we anticipate to close the transaction in mid to late June.”
JCG Foods agreed to pay $49.7 million plus the value of inventory and accounts receiveables, which stood at about $43 million as of January 28, and minus post-bankruptcy payables and accrued expenses that totaled about $7.7 million, according to court documents. JCG will pay $69.5 million in cash and the rest in a promissory note bearing 8 percent interest, which will be guaranteed by Grendys and a $5 million portion by Koch Foods. Koch Foods is the 7th-largest U.S. chicken producer by pounds.
Cagle’s sought court protection on October 19, 2011 listing more than $50 million in assets and less than $50 million in debt in its Chapter 11 pettition. Cagle’s assets include two processing plants, a feed mill, and a hatchery. The company processed about 1.7 million chickens a week.
