Business

Chicken Company Serving Investors A $3.2 Billion Sandwich

No featured image available

Tyson Foods gobbled up frozen sandwich maker AdvancePierre for $3.2 billion Tuesday, furthering its mission to become the largest meat provider in the U.S.

Already the country’s biggest provider of broiler chickens, Tyson’s acquisition of AdvancePierre is the latest in a string of moves by the meat house to become the dominant player in the U.S. protein market. The company purchased Don Julio foods in 2013, the Hillshire brand for $8.2 billion in 2014 and has even dabbled in throwing money behind alternative-meat startups like Beyond Meat.

AdvancePierre gets 66 percent of its revenue from selling ready-to-eat sandwiches through food-service companies and corner stores, Reuters reports. AdvancePierre also has an EBITDA (earnings before interest, tax, depreciation and amortization) well above Tyson.

EBITDA can be an indicator of a business’s health and earnings potential, and is occasionally employed to compare the profitability between companies because it extricates accounting and financing decisions from overall performance. Tyson had an EBITDA of 9.4 percent in 2016, compared with AdvancePierre’s 15.9 percent.

Tyson expects the merger to save them around $200 million, and won’t consider any share buybacks for two years to cushion some of the costs of acquiring AdvancePierre. The company is also reportedly considering shedding three of its non-protein brands, like Sara Lee Frozen Bakery.

Follow Robert on Twitter

Send tips to [email protected]

Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact [email protected].