OK Industries sold to Mexican-based company (Updated)
by October 28, 2011 9:16 am 803 views
Celaya, Mexico-based Industrias Bachoco announced Friday (Oct. 28) that it will acquire OK Industries — a company based in Fort Smith since 1933.
Bachoco officials say they will continue to operate the company as OK Industries, but it is uncertain what will happen to the OK’s corporate headquarter jobs in Fort Smith.
Terms of the deal were not disclosed.
The news comes less than six months after the passing of Collier Wenderoth Jr., a U.S. poultry industry icon who assumed control of the family business in 1955 and grew it to a large regional poultry operation. Today, OK Industries employs about 5,000 in western Arkansas and eastern Oklahoma. The company was one of the largest privately held operations based in Arkansas. The company operates large processing plants in Fort Smith and Heavener, Okla.
According to the Industrias Bachoco statement, OK Industries processes 2.5 million chickens per week, and has annual sales of about $600 million. OK Industries supplies grocery retailers, foodservice distributors and commodity customers in all U.S. as well as foreign markets.
"This acquisition is one of the most transcendental steps for Bachoco, since it is our first international acquisition and first entry into the U.S. poultry market,” Rodolfo Ramos, Bachoco’s CEO, said in a statement. "With the acquisition of O.K. Industries, Bachoco reinforces its commitment to serving its markets, through the incorporation of its nearly 4,000 local workers into the Company’s workforce, as well as hundreds of regional growers. Bachoco will continue to operate its newly-acquired entity as O.K. Industries, Inc."
Bachoco’s is the largest poultry company based in Mexico and its products include chicken, table eggs, feed and swine. The company was founded in 1952 and has 60 distribution centers and reported $2 billion in sales for 2010.
Updated info: Trent Goins, head of sales and marketing with OK Industries, said Bachoco is retaining all jobs, including the corporate headquarters operation in Fort Smith. He said the deal is expected to close Monday (Oct. 31).
“It’s business as usual. … The entire management team has been retained by the company,” Goins said. “From an employee standpoint, and for all our contract growers, and customers and vendors, we are really excited and think this is a great day.”
Goins, whose father is OK Industries CEO Randy Goins, said his father and the late Collier Wenderoth Jr. decided in January that the company needed to “grow, and grow fast.” That would happen through a merger or some other transaction, Trent Goins explained.
Following the decision, OK Industries hired Philadelphia-based SSG Capital Advisors to help facilitate a deal. That eventually resulted in Bachoco buying OK Industries and setting it up as a wholly-owned subsidiary, Trent Goins said.
Because Bachoco has no infrastructure or management in the U.S., the Mexican company will depend on the OK management team to help grow their presence in the U.S., Goins explained. He also said being connected to Bachoco will help OK Industries expand its export business.
Goins wouldn’t speculate on how soon or how much Bachoco will invest in OK Industries for the purposes of expanding the U.S. financial and geographic footprint. Goins did say he believes his grandfather, Collier Wenderoth Jr., would approve of the deal.
“He would be very excited today. This allows us to grow and grow fast,” Goins said.
Shares of Bachoco’s are traded on the New York Stock Exchange (ticker: IBA). The share price was above its Thursday closing price of $22.57 in early morning trading. During the past 52 weeks the share price has ranged from a $28.88 high to a $19.21 low.
OK Industries is the second large acquisition for Bachoco’s in recent months. On Aug. 23 the company announced it had acquired Monterrey, Mexico-based Grupo OSIG, a company that produces and distributes processed beef and chicken.