May 15, 2018 | Subsidiaries of Tyson Foods Inc. have agreed to buy the poultry rendering and blending assets of American Proteins Inc. and AMPRO Products Inc. The acquisition is expected to enable Tyson Foods to recycle more animal products for feed, pet food, and aquaculture, among other things, and expand its presence in the growing animal feed ingredient business. The agreement is subject to customary closing conditions, including regulatory approval.
“Rendering plays a key role in growing our business and helping us deliver on our sustainability goals,” said Tom Hayes, president and CEO. “Through this important business, no part of the animal goes to waste, and we can recycle valuable ingredients into feed for pets and aquaculture.”
Rendering is an environmentally friendlier way to keep animal products out of landfills and potentially reduce greenhouse gas emissions. According to the National Renderers Association, rendering’s contribution to carbon emission reduction in the U.S. and Canada is equivalent to removing more than 12 million cars from the road annually.
“This acquisition is a great complement to our existing business, gives us the ability to render raw materials in a region we don’t currently serve, and better positions us to meet the competitive, fast-growing national and global demand for animal protein,” said Doug Ramsey, group president of poultry for Tyson Foods.
The acquisition includes four rendering plants located in Georgia and Alabama and 13 blending facilities located throughout Southeastern and Midwestern states. The facilities are expected to provide additional capacity to Tyson’s current animal byproducts business. Approximately 700 people work for American Proteins and most are expected to become Tyson Foods team members.
Mark Ham, president and chief executive officer of American Proteins said, “We value and appreciate our 700 plus employees as well as the relationships we have with our suppliers and customers, and are confident that after the transaction closes the Tyson team will offer them the same commitment to service and quality as provided by American Proteins.”
The purchase price is approximately $850 million. Over the next 12 months, the business is expected to generate adjusted net sales of more than $550 million. Tyson expects to realize synergies over time driven by manufacturing efficiencies, mix optimization and distribution network consolidation.
“American Proteins’ management team has built a great business and the production teams have done a wonderful job making animal feed ingredients for years. We admire the company and believe this will be a good cultural fit,” Ramsey said. “Investing in this part of our business is an investment in the future sustainability of our company.”