IPO of the Week: Tyson Foods

Tyson Foods (TSN US) | AdvancePierre (APFH US)

From the Great Depression in 1931, Springdale, AR-based Tyson Foods grew from a small Midwest chicken hatchery to one of the world’s largest fully-integrated producer, processor and marketer of chicken, beef and pork and a large player in the prepared foods segment.

Cincinnati, OH-based AdvancePierre Foods manufactures and distributes ready-to-eat sandwiches, sandwich components, and other entrées and snacks. AdvancePierre is the combined company of the merger of Pierre Foods, Advance Food Company and Advance Brands in 2010.

Target IPO History
On 7/15/2016, AdvancePierre Foods launched on NYSE led by Barclays, Credit Suisse and Morgan Stanley. The stock was priced at $21.00 per share, within expected price range of $20.00 – $23.00/share. With a full subscription of 18.6 million offered shares and the 15% over-allotment option fully exercised, the company was valued at $1.65 billion at offer. AdvancePierre opened at $23.50/share, a 11.9% pop from its offer price, and closed at $24.00/share with a 14.29% initial return. Howard Mark’s hedge fund Oaktree Capital held 57.18% of AdvancePierre’s stake after the offering.  AdvancePierre Foods was included in the IPOX® U.S. 100 Portfolio on 9/16/2016.

M & A History
Tyson Foods announced to buy AdvancePierre Foods for $40.25 per share on 4/25/2017. The offer price represented a 9.76% premium to AdvancePierre’s previous close. The total enterprise value of the transaction was approximately $4.2 billion. The acquisition of AdvancePierre Foods was completed on 6/7/2017 and Tyson Foods was included in the IPOX® U.S. 100 Portfolio on 6/8/2017.