Tyson Foods Preparing to Sell IBP Subsidiary

Tyson Foods Inc. Chairman, President and CEO John Tyson had hinted there could be further divestitures following the Feb. 1 annual shareholders meeting.

On April 5, the Springdale company announced it would sell off one of the subsidiaries from its September purchase of IBP Inc. of Dakota Dunes, S.D. Specialty Brands Inc. of Ontario, Calif., sells frozen food products to foodservice industry customers such as hotels and restaurants. Specialty Brands’ assets may be worth $100 million-$200 million, with annual revenues of roughly $300 million, but it has not been a strong profit driver for IBP, sources said.

Included in the sale are brands such as Butcher Boy meats, Jose Olé and Posada Mexican foods, Rotanelli frozen filled pastas and Fred’s appetizers, such as frozen meatballs and snacks.

Little Rock investment firm Stephens Inc. is handling the transaction.

“[Tyson Foods] retained Stephens to evaluate and coordinate activities relevant to the potential sale,” said Tyson Foods spokesman Ed Nicholson.

Following the Feb. 1 shareholders meeting, Tyson told the Business Journal that the company’s ability to reduce its debt load by $550 million in 2001 would allow Tyson Foods to do an assessment of what it could do to better serve its customers.

“It’s what we call a portfolio analysis,” he said. “We want to see what really fits our protein needs and our customers’ needs, like what if we had this product here and that product over there. But there won’t be a big acquisition.”

Tyson Foods is projecting $25 billion in revenue for 2002.