Investment group buys Five River Feeding from JBS
January 18, 2018
GREELEY, Colo., and NEW YORK, Jan. 17, 2018 (GLOBE NEWSWIRE) — Affiliates of Pinnacle Asset Management, L.P., a leading commodities and natural resources investment firm, today announced they have entered into an agreement to acquire the U.S.-based cattle feeding assets and farms, collectively known as Five Rivers Cattle Feeding, from JBS USA, a leading global food company, for approximately $200 million (USD).
JBS announced in June that it planned to sell the feeding operation but had not made any deals until now.
Five Rivers Cattle Feeding is the largest cattle feeding operation in the world, with roots in the U.S. dating back to the 1920s. The transaction includes 11 feed yards across Arizona, Colorado, Idaho, Kansas, Oklahoma and Texas, with feeding capacity of more than 900,000 head of cattle, and a long-term agreement to supply cattle to JBS USA beef processing plants. The current Five Rivers management team will remain in place, led by president and CEO Mike Thoren, to ensure business continuity and build upon Five Rivers' strong track record of innovation and stewardship.
"The sale of the Five Rivers Cattle Feeding assets and farms is a strategic move that will allow JBS USA to more efficiently deploy working capital and focus on the company's core food and value-added products businesses," said Andre Nogueira, CEO of JBS USA. "The transaction concludes the Divestment Program previously announced and unanimously approved by the JBS S.A. board of directors, and more favorably positions the company for future opportunities. The long-term partnership with Pinnacle will ensure JBS USA's continued ability to produce high-quality beef products, including natural, certified humane, raised without antibiotics, source-verified and traditional products, enjoyed by customers and consumers around the world."
"The acquisition of the largest and most respected cattle feeding operation in the world continues Pinnacle's strategic path of investment and development of our diversified, global, physical commodity platform, of which livestock is a critical sector," said Jason M. Kellman, managing partner and Chief Investment Officer of Pinnacle Asset Management. "We are excited to work closely with our operating partner, Arcadia Asset Management and strategic partner, Ospraie Management to support Five Rivers' talented management team."
"Ospraie is pleased to partner with Pinnacle and Arcadia on this market-leading, commodity transaction," said Jason Mraz, president of Ospraie Management, who is a strategic partner to Pinnacle on this transaction. "We have a long history of working together and have great respect for both partners' expertise in physical commodities."
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"We are excited to combine Arcadia's livestock marketing and risk management experience with the first-class management team at Five Rivers," said Jordan Levi, managing member of Arcadia Asset Management, LLC. "We believe that the complementary strengths of Pinnacle, Arcadia, Ospraie and Five Rivers will create significant value. We look forward to continuing the legacy of best-in-class production, livestock care and animal welfare, and environmental stewardship established by the more than 600 skilled professionals who comprise the Five Rivers Cattle Feeding team."
An orderly sales process will be conducted to ensure normal business operations during the transition. JBS Five Rivers will continue to operate as usual, including the purchasing of cattle and commodities in the ordinary course of business, until the closure of the transaction. In addition, JBS USA will continue agreements to purchase cattle from feed yards associated with Five Rivers Cattle Feeding operations.
Completion of the acquisition is subject to U.S. regulatory review and approval, approval from the JBS S.A. Board of Directors and Pinnacle Asset Management, L.P., securing the relevant funding.
About Pinnacle Asset Management, L.P.
Founded in 2003, Pinnacle Asset Management, L.P. is a private, New York-based alternative asset management firm focused on the global commodities markets with approximately $2.3 billion under management. Pinnacle provides its institutional investor clientele with exposure to the global commodities markets via physical and financial absolute return funds, strategies and products. Pinnacle is registered with the Securities and Exchange Commission, is a commodity trading adviser and commodity pool operator registered with the Commodity Futures Trading Commission and a member of the National Futures Association.
About Arcadia Asset Management, LLC
Based in Oklahoma City and founded by Jordan Levi in 2009, Arcadia is a leading private cattle feeding operator. Mr. Levi is a committee member for the National Cattlemen's Beef Association and is a co-founder of the Fed Cattle Exchange. He served on the Board of Directors of the Texas Cattle Feeders Association.
About Ospraie Management
Ospraie is an investment management firm founded in 1999. Ospraie actively invests in basic industry and commodity markets on a global basis from a fundamentally driven, long-term perspective. The firm expresses its views by participation in the broader commodity and public equity markets, as well as private transactions.
ABOUT JBS USA
JBS® USA is a leading processor of beef and pork in the U.S., a leading processor of beef in Canada and a majority shareholder of Pilgrim's Pride Corporation, the largest poultry company in North America, with operations in the U.S., Mexico, the U.K. Ireland and continental Europe. JBS USA also enjoys a strategic relationship with JBS Australia, the leading processor of beef, lamb and smallgoods in Australia.
Headquartered in Greeley, Colo., JBS® USA processes, prepares, packages and delivers fresh, further-processed and value-added beef, pork, lamb and poultry products for sale to customers in more than 105 countries on six continents. The company employs more than 100,000 team members and operates more than 120 facilities in the United States, Australia, Canada, Puerto Rico, Mexico, the U.K. and Europe.
–Pinnacle Asset Management, L.P.