US-based egg supplier Cal-Maine Foods has acquired “substantially” all of the assets of local peer ISE America and “certain affiliates” for around $110m.
The deal struck by the Nasdaq-listed company includes shell egg production and facilities with a capacity of about 4.7 million laying hens, along with approximately 4,000 acres of land, according to a statement.
Cal-Maine Foods said ISE America produces around one million cage-free eggs and 1.2 million pullets, with feed mills also part of the purchase price. Production operations include sites in Maryland, New Jersey, Delaware and South Carolina, distributing eggs across the Northeast and Mid-Atlantic states.
Sherman Miller, the president and CEO of Mississippi-headquartered Cal-Maine Foods, said: “We are excited about the opportunity to significantly enhance our market reach in the Northeast and Mid-Atlantic states with the acquisition of these assets from ISE.
“The added production and distribution capabilities will allow us to serve new customers and expand capacity, particularly in the Northeast, which is largely a new territory for Cal-Maine Foods.”
Cal-Maine Foods added the transaction marks the company’s first production assets in Maryland, New Jersey and Delaware. Employees of ISE America will be retained, although numbers were not provided.
Just Food has asked Cal-Maine Foods for clarification of the affiliates making up the deal and the precise number of factories and workers involved.
The latest financial results issued in April showed Cal-Maine Foods’ third-quarter and year-to-date sales and profits dropped due to lower selling prices linked to higher prices in the corresponding period related to the outbreak of highly pathogenic avian influenza (HPAI).
Cal-Maine Foods was forced to suspend production in April – outside of the third-quarter reporting period – at a site in Parmer County, Texas, due to bird flu. Another facility in Kansas was also earlier hit by HPAI.
Commenting on the third-quarter results to 2 March in April, Miller said: “We are very pleased with Cal-Maine Foods’ strong financial and operating performance for the third quarter of fiscal 2024.
“Our sales reflect lower average selling prices compared to a year ago, when the shell egg industry experienced record high market prices due primarily to the impact of highly pathogenic avian influenza and other market factors resulting in a significant reduction in supply.
“While the more recent outbreaks of HPAI have also affected supply and caused market prices to move higher, the overall market impact has not been as severe.”
Sales for the quarter dropped 30% to $703.1m, while net income was down 55% at $146.4m.
Over the nine months, sales declined 31% to $1.68bn. Net income fell 74% to $163.4m.
