JBS USA to sell its massive U.S. cattle feeding operation to Pinnacle Asset Management
for Greeley Tribune
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, according to a news release.
Greeley, Colo.-based JBS USA will sell its massive cattle feeding operation to Pinnacle Asset Management for about $200 million.
Officials of Pinnacle Asset Management, a private New York-based asset management firm that focuses on global commodities markets, announced in a press release Jan. 17 the company had acquired Five Rivers Cattle Feeding from JBS USA. The global food company announced its intention to sell Five Rivers Cattle Feeding, the largest cattle feeding operation in the world, back in June, when parent company JBS SA, based in São Paulo, Brazil, agreed to pay a $3.1 billion fine to settle a major bribery scandal involving politicians and company executives in Brazil. JBS SA’s board of directors approved the sale, though few initially thought the company would sell any of its U.S. assets.
The sale to Pinnacle includes 11 feed yards across Arizona, Colorado, Idaho, Kansas, Oklahoma and Texas, with feeding capacity of more than 900,000 animals. The firm also agreed to supply cattle to JBS USA beef processing plants, according to the release.
“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, in the news release. “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.”
JBS Five Rivers will operate as usual until the closure of the transaction, the release stated. In addition, JBS USA will continue agreements to purchase cattle from feed yards associated with Five Rivers Cattle Feeding operations.
The current Five Rivers management team will remain in place, led by President and CEO Mike Thoren, to ensure business continuity, the release said.
“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, in the release. ❖