Baker & McKenzie Advises Pilgrim’s Pride in an Agreement to Sell a Majority Equity Stake of the Reorganized Company to JBS
Deal Announcement
September 17, 2009
Dallas, TX, September 17, 2009 – Baker & McKenzie served as lead counsel to Pilgrim’s Pride in reaching an agreement to sell 64% of the new common stock of the reorganized Pilgrim’s Pride to Brazilian meat producer JBS S.A., through its JBS USA Holdings, Inc. subsidiary (JBS U.S.A) for $800 million in cash. The transaction represents an enterprise value of approximately $2.8 billion. Pilgrim’s Pride and six of its subsidiaries that are debtors and debtors in possession in the Chapter 11 cases pending in the United States Bankruptcy Court for the Northern District of Texas will be filing a joint plan of reorganization and disclosure statement under Chapter 11 of the Bankruptcy Code. Pilgrim's Pride anticipates the plan to be confirmed by the Bankruptcy Court in time to emerge from bankruptcy before the end of December.
Under the terms of the agreement, existing stockholders will own 36% of the reorganized Pilgrim’s Pride, and all creditors of the debtors holding allowed claims will be paid in full, either in cash or by issuance of a new note. The plan also calls for an exit facility for senior secured financing in an aggregate principal amount of $1.75 billion to be provided by a group of lenders arranged by Joint Lead Arrangers CoBank, ACB and Rabobank.
The Baker & McKenzie team was led by Crews Lott, Amar Budarapu and Gerry McGrath of the Firm’s Dallas office, who worked with a team from Weil Gotshal & Manges LLP. Lazard acted as sole investment banker to Pilgrim’s Pride in connection with its financial restructuring and transaction with JBS.
“We are pleased to have advised our long-time client Pilgrim’s Pride in this agreement with JBS, which upon approval by the Bankruptcy Court, would allow full repayment of its allowed creditor claims and substantial retained value for its existing stockholders,” said Crews Lott. "The Baker & McKenzie team worked together to bring a good result for the client.”