Subsidiaries of Tyson Foods, Inc. agreed to purchase the poultry rendering and blending assets of American Proteins, Inc. and AMPRO Products Inc. The arrangement was announced Tuesday (May 15).
The purchase price is approximately $850m, Tyson reported. In the next 12 months, the newly acquired business is forecast to have adjusted net sales of more than $550m, and Tyson anticipates finding ways to increase efficiency over time.
The expectation is that the rendering and blending operations will continue to operate in a manner similar to how they are functioning currently, a spokesperson for Tyson told FeedNavigator. This includes continuing to source the raw materials processed from the same suppliers.
“American Proteins’ operations are geographically located in areas strategically near Tyson Foods’ poultry plants, so this acquisition provides additional byproduct rendering capacity,” he told us.
Tyson expects the acquisition to allow it to recycle more animal-based by-products into usable ingredients to meet the needs of the animal feed, aquaculture and pet food industries. Rendering is one technique to keep animal products out of landfills and potentially limit the emissions of greenhouse gases, it said.
A specific timeline for the integration of the new company and product lines is not being announced at this time, the spokesperson said.
The agreement remains subject to “customary closing conditions,” which include regulatory approval.
The products generated at the new facility are mainly intended to meet intentional export demand, said the spokesperson. A focus is on exporting to Asia and Latin America to meet the expanding needs of the aquaculture and pet food industries.
Add-on to existing rendering business
The agreement includes four rendering plants located in Alabama and Georgia along with 13 blending facilities set across the southeastern US and the Midwest, Tyson said. They are set to add capacity to Tyson’s current animal byproducts business, and the majority of American Proteins’ 700 employees are expected to transition to being Tyson Foods employees.
“This acquisition is a great complement to our existing business, gives us the ability to render raw materials in a region we don’t currently serve, and better positions us to meet the competitive, fast-growing national and global demand for animal protein,” Doug Ramsey, group president of poultry for Tyson Foods, said in a release.
“Investing in this part of our business is an investment in the future sustainability of our company.”