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AgFeed Industries, Inc., one of the largest independent hog production and animal nutrient companies in China, announced today that it has reached an agreement in principle to acquire the operations of M2P2 LLC based in Ames, Iowa. AgFeed and M2P2 have entered into a non-binding term sheet summarizing the principle terms of the acquisition and expect to complete the transaction later this summer. It is anticipated that John Stadler, Chairman of M2P2 will join AgFeed’s Board of Directors upon completion of the transaction. M2P2 is a leading U.S. hog production company, having set standards of excellence in innovation, productivity and efficiency in pork production. M2P2 is a joint venture partner with AgFeed in AgFeed International Protein Technology Corp. (“AFIPT”).Dr. Songyan Li, AgFeed’s Chairman, stated, “through our work together in AFIPT we have developed enormous respect for M2P2 and its team of professionals. M2P2’s dedication to continuous performance improvements in the hog production industry has resulted in impressive performance metrics in sow productivity and feed conversions. For both AgFeed and M2P2 this is a transformational opportunity to position our combined businesses to achieve superior growth and earnings on an international basis as we respond to global market opportunities.”
Mr. Junhong Xiong, AgFeed’s President, observed “acquisition valuations are attractive by absolute and relative standards and present our company with a unique strategic opportunity. M2P2’s expertise and excellence will be instrumental in assuring the success of our new western-style farms in Dahua and Xinyu.”
The aggregate consideration AgFeed expects to pay to acquire M2P2 is $16 million, subject to adjustment based upon the book value of M2P2’s assets, of which 80% will be paid in cash and 20% in AgFeed common stock. The completion of the transaction is subject to a number of conditions including the completion of due diligence, negotiations and execution of definitive agreements and board approvals. Pending transaction completion, M2P2 has agreed that its directors, managers, members, officers, employees and agents will not solicit or participate in other negotiations or discussions, or provide non-public information with respect to any investment in, or acquisition of, M2P2 or any similar transaction for a certain period of time.
http://www.agfeedinc.com/news/agfeed-industries-inc-announces-agreement-to-acquire-leading-us-hog-production-company
