Tyson acquires assets of ethnic food company

Tyson Foods Inc. on Monday continued to accelerate the expansion of its value-added foods portfolio acquiring of the assets of Circle Foods. This deal is in line with Tyson’s efforts to expand its valued-added sales and move further away from the lower margin – raw commodity processing.

California-based Circle Foods makes frozen and refrigerated handheld Mexican foods, uncooked tortillas and Indian flatbreads, for Claridge Food Group.

Terms of the acquisition, which was completed June 1, were not disclosed. Tyson Foods said it does not plan any significant operational changes and intends to keep the existing Circle Foods management and production team in place to grow the business. The operation has approximately 600 full-time employees and has been in operation for 25 years.

"Claridge and the Circle Foods team have developed an outstanding portfolio of products and customers, with a fantastic plant and workforce, and will be an excellent fit within our branded consumer products group," said Donnie Smith, president and CEO of Tyson Foods. "We believe Tyson's robust sales structure, as well as our frozen and refrigerated foods distribution system, will enable this business to accelerate its growth."

In recent months Smith vowed to increase Tyson’s value-added sales by 6 to 8% which is about $1 billion annually.

"Our strategy is to accelerate our growth in domestic value-added poultry and Prepared Foods, as well as international poultry, and we're executing that strategy," Smith said during the company’s Feb. 1 earnings call.

Last year roughly 45% of Tyson Foods’ sales came from value-added products. That was $15 billion of the $33.3 billion the meat giant posted in total revenue, according to analysts with Fitch Rating Service.

"We are delighted to see the transition of Circle Foods to Tyson Foods, who are committed to continue the growth of the business. Right from the beginning when we met the Tyson people and organization we knew we had an excellent partner we could work with on this transaction," said Stephen Bronfman, executive chairman of Claridge. "We are confident that Circle Foods will flourish under Tyson's ownership."

The brands involved in this acquisitions include: NUEVO GRILLE® and TORTILLALAND® handheld Mexican products, TORTILLALAND® uncooked tortillas and ROTILAND® Indian flatbreads.

The company, which operates a 159,000 square-foot plant in San Diego, also produces private label products for various customers. The plant produces frozen burritos, chimichangas, enchiladas, quesadillas, tacos and tamales, as well as tortillas and Indian flat breads, which are sold at major grocers across the country including Walmart and Safeway.