Montebello, CA - CFP Holdings Inc., a leading developer, manufacturer and marketer of value-added meat and poultry products, announced that it has signed a commitment letter with an asset-based lender to establish a new senior revolving and term credit facility of up to $40 million.
This new arrangement will replace CFP's existing senior credit facility and substantially improve its financial flexibility.
Eric W. Ek, CFP's chief financial officer, noted: "The new facility will provide more attractive rates and terms, and will result in a nearly 50-percent improvement in net pro forma revolver availability, as of Dec. 31, 1997."
Ek added, "We are pleased to have the opportunity to significantly enhance CFP's liquidity and lower its borrowing cost during this important period of growth and transition for the business." The refinancing is expected to close in the next 30 days.
CFP also announced further progress in its previously announced add-on acquisition. CFP expects to enter into a definitive agreement in the next several weeks to acquire a privately held Midwestern value- added beef processor.
The company, the name of which has not been disclosed, produces a line of beef and chicken sandwich steak products for sale into food service and retail markets. For the fiscal year ended Nov. 30, 1997, the company generated net sales and EBITDA of approximately $18.6 million and $2.6 million, respectively, and had total assets of approximately $5.4 million. The purchase price is approximately $11 million in cash, plus up to an additional $3.5 million in future payments contingent upon continued growth in profitability.
CFP also announced that it has retained an agent to arrange for the issuance of up to $15 million of preferred stock, the proceeds of which will be used, in part, to finance the acquisition.
"This acquisition represents an excellent strategic opportunity for CFP and its Quality Foods operation," said Robert Gioia, president and chief executive officer of CFP.
"Its strong historical growth and future growth prospects, coupled with its complementary product lines and geographic sales presence make it an ideal fit for CFP as we continue to pursue our growth strategy. Furthermore, the acquisition will effectively double Quality Foods' national sales force, add a retail presence and further expand our raw material supply relationship," Gioia said.
Pending financing, CFP expects to close the transaction early in its June fiscal quarter.
Press for Information on Placing Your Ad Here
Meat Industry Insights News Service
P.O. Box 553
Northport, NY 11768
Phone: 631-757-4010
Fax: 631-757-4060
E-mail: sflanagan@sprintmail.com
Web Site: http://www.spcnetwork.com/mii