Pilgrim's Pride to Purchase Gold Kist Inc. for 0.47 Times Revenue

Weekly Corporate Growth Report, Dec 11, 2006

The Deal: After rejecting an earlier hostile offer of $20 per share from Pilgrim's Pride, Gold Kist Inc. has accepted a sweetened offer of $21 per share, or nearly $1.1 billion, from the rival poultry producer. The new deal will be in the form of a cash tender offer scheduled to close on December 27. The deal has already been approved by US regulators and Pilgrim officials stated the purchase could be completed by the end of 2006. About 67 percent of Gold Kist shares were tendered into the original offer.

Discussion: Gold Kist markets whole chickens and chicken parts under the Gold Kist Farms, Early Bird, McEver's, and Medallion brand names. The company markets to grocers and to foodservice companies. Gold Kist operates its own hatcheries, feed mills, and processing facilities. In addition to poultry, Gold Kist also markets hogs, provides financing to farmers, and develops and installs wastewater treatment systems.

Pilgrim's Pride is a leading poultry producer. The company's operations include hatching, raising, processing, distributing, and marketing chicken and turkey. The company markets its products to restaurants, grocery stores, and frozen food producers. Company brands include Pilgrim's Pride, Pilgrim's Signature, Country Pride, Pierce, Easy-Entree, and Wing-Dings.

The acquisition of Gold Kist will make Pilgrim's Pride the world's largest poultry company.