Springdale-based Tyson Foods noted in a federal filing Thursday (Aug. 9) an agreement to sell its pizza crust business to private equity firm Austin, Texas-based Peak Rock Capital. Tyson did not release financial terms, but said the transaction is slated to close next month.
The sale includes TNT Crust, a business founded in 1981 that produces partially-baked and self-rising pizza crusts for frozen pizza manufacturers and foodservice customers. The more than 400 people employed at two manufacturing facilities in Green Bay, Wisc., are expected to continue with the company under the new owner.
“TNT Crust is a solid business supported by a great team, however, our strategy is focused on expanding Tyson Foods’ leadership position in protein,” said Sally Grimes, Group President, Prepared Foods. “We’re pleased Peak Rock Capital plans to continue operating the business and provide continued opportunities for the workforce. We intend to work closely with them to ensure a smooth ownership transition for everyone, including our team members and customers.”
Other companies in the Peak Rock portfolio include Gold Coast Bakeries, American Natural Foods, Lew’s Holding Corp., and Berner Food & Beverage.
The divestiture is part of Tyson’s plan to focus solely on protein businesses as it seeks to grow market share and increase its global scale if the right acquisition opportunities arise. Tyson Foods CEO Tom Hayes was asked recently about the company’s negotiations with Keystone Foods, owned by Brazilian food company Marfrig. He said the company does not divulge information about ongoing negotiations but did say the company is poised to make more acquisitions.
“What you should take away is we are always going to focus on those things that will bring value to our shareholders. What we talk about consistently is that buying new brands, certainly buying capabilities the company doesn’t possess today, that we can take advantage of growth areas, and then also, getting into new geographies, whether its in the U.S. or abroad,” Hayes told the media during the earnings call on Aug. 6. “When you think about the areas that we are to be focused on, that should give you the insight in terms of what our strategy will be for acquisitions.”
Marfrig has said five companies submitted qualified proposals and Tyson was the lead bidder in late July. During Tyson’s recent earnings release the company said it completed the sale of its Sara Lee Frozen Bakery and Vans business units to private equity firm Kohlberg Company for $615 million, which should close in the next month.
Also Thursday, Tyson’s board of directors declared a quarterly cash dividend of 30 cents per share for Class A stock and 27 cents per share the Class B stock, which is held exclusively by the Tyson family. The dividend is payable on Dec. 14 to shareholders of record as of Nov. 30.
Shares of Tyson Foods (NYSE: TSN) closed Thursday at $57.70, up 15 cents on the day. For the past 52-weeks Tyson shares have traded between $56.79 and $84.64. Tyson Foods fiscal 2018 ends Sept. 30. Year-to-date Tyson Foods shares are down 13.52%, but the company expects to grow annual earnings by 10% year-over-year despite ongoing challenges in the pork and chicken segments.