Seneca Foods To Acquire Operating Assets of Allens for $148M

Siloam Springs-based vegetable leader Allens Inc. announced Tuesday it has entered into an asset purchase agreement with Seneca Foods Corp. of Marion, NY.

Seneca, according to a news release, will act as a “stalking horse bidder” in the Chapter 11 reorganization, meaning it has the opportunity to match any other bids received.

Privately held and founded in 1926, Allens is a processor of canned and frozen vegetables. The company filed for Chapter 11 bankruptcy protection Oct. 28.

Also on Tuesday, Allens filed a revised motion seeking authorization from the United States Bankruptcy Court for the Western District of Arkansas to conduct an auction pursuant to Section 363 of U.S. Bankruptcy Code.

The motion also sets out the proposed bidding procedures for the auction. Pursuant to the asset purchase agreement, Seneca will serve as the “stalking horse bidder” with an agreement to acquire substantially all of the Company’s canning operations for $148 million in cash subject to certain adjustments.

The asset purchase agreement sets the floor for the auction, which is designed to achieve the highest or otherwise best offer.

Allens, according to the release, has received interest from several bidders, many of whom are expected to be active participants in the auction.

Throughout this court-supervised sales process, Allens will continue to operate the business in the ordinary course, focusing on its core canned vegetable markets.

“We are pleased to reach this agreement with Seneca and to begin a court-supervised sales process intended to maximize the value of Allens,” Jonathan Hickman, chief restructuring officer of Allens, said in the release. “We are encouraged by the interest Allens has received and are committed to an outcome that provides the most value for our creditors.”

Allens is seeking a hearing from the court to approve proposed bidding procedures and bid protections to set deadlines for interested parties to submit qualified bids to acquire substantially all of the Company’s assets and to set dates for an auction and sale hearing related to the sale.

As previously announced, Allens is also actively pursuing a sale of its frozen vegetables business in Montezuma, Ga., which specializes in frozen breaded vegetable products and Southern-style frozen vegetables.

The company expects to sell those assets through separate application to the court, according to the news release.

Seneca Foods and Allens were exploring a merger two years ago.