000227 IBP Completes CBFA Transaction

Dakota Dunes, SD - IBP, inc. has successfully completed the acquisition of Corporate Brand Foods America (CBFA), company officials reported. The transaction, which was initiated in December, is another aggressive step by the company to diversify into the prepared foods business.

CBFA is a leader in the production of private label products, one of the fastest growing segments in the food industry. In addition, the company has a number of very strong regional brand names, including Jordan's, Wright Brand and Jac Pac. The company's primary products include sliced luncheon meat, bacon, bulk ham, deli meats, ground beef, roast beef and hot dogs, which are sold to supermarket chains, club stores, foodservice distributors and processors.

“This purchase increases IBP's presence in a business with a more predictable earnings base,” according to Robert L. Peterson, IBP chairman and chief executive officer. “It also puts the company in an excellent position to benefit from consumer trends, such as increasing demand for convenient, ready-to-eat, ready-to-cook foods. In addition, there is a complementary fit among CBFA product lines, distribution channels and those of our existing businesses.”

According to Larry Shipley, IBP chief financial officer, “Under the terms of the agreement, we acquired all outstanding shares of CBFA in exchange for 14.379 million shares of IBP common stock. The transaction is accounted for as a pooling of interests, which means that IBP's future quarterly and year-end statements will include CBFA's historical financial results.”

Based on Monday's closing price of $14.313 per share, the value of the transaction was $550 million. This valuation includes the redemption of $28 million in preferred stock as well as the refinancing of $316 million of CBFA debt. Due to the completion of the transaction, the total number of outstanding shares of IBP common stock is now approximately 107 million.

CBFA emerged in the late 1990s from a vision to create a processed meat company with a broad menu of products. Five well-established companies fulfill the CBFA vision: International Trading Company, Iowa Ham Canning, Jac Pac Foods, Jordan's Meats and Wright Brand Foods. CBFA operates 11 plants in Texas, Iowa, Nebraska, Maine and New Hampshire and employs approximately 3,600 people.

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