After the privately held Arkansas canning company filed Chapter 11 bankruptcy in October, Allens, Inc. of Siloam Springs announced Tuesday that it has entered into an asset purchase agreement with Seneca Foods Corp., a leading nationwide producer of canned fruits and vegetables out of Marion, N.Y.
The transaction will take place through a court supervised auction pursuant to Section 363 of U.S. Bankruptcy Code.
According to today’s asset purchase agreement, Seneca will serve as the "stalking horse bidder" with an agreement to acquire substantially all of Allens’ canning operations for $148 million in cash subject to a working capital adjustment, plus the assumption of certain liabilities.
Allens noted it has received interest from several other financial and strategic bidders, many of whom are expected to be active participants in the auction. Throughout the sales process, Allens will continue to operate business as usual.
"We are pleased to reach this agreement with Seneca and to begin a court supervised sales process intended to maximize the value of Allens," said Jonathan Hickman, chief restructuring officer of Allens. "We are encouraged by the interest Allens has received and are committed to an outcome that provides the most value for our creditors. I would also like to thank our talented employees – the interest we are seeing in our business is a direct reflection of their continued hard work and dedication."
Seneca said if they successfully acquire "substainlly all the operating assets of Allens, Inc.", those assets will fit with Seneca’s "long-term growth objective" to expand its line of canned vegetables including sweet potatoes, southern vegetables, and broaden its offerings of dry beans and spinach.
Seneca Foods is a processor of canned fruits and vegetables whose products are sold under the Libby’s, Blue Boy, Aunt Nellie’s Farm Kitchen, Stokely’s, READ, Seneca Farms and Seneca labels. Seneca also sells canned and frozen vegetables under General Mills’ Green Giant label.
Allens is also actively pursuing a sale of its frozen vegetables business in Montezuma, Ga., which specializes in frozen breaded vegetable products and Southern-style frozen vegetables. The company expects to sell those assets through separate application to the court.
Allens Inc., has been family owned and operated since 1926, selling canned and frozen vegetables under a number of brands including Allens, Princella, Freshlike and Royal Prince.
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