Smithfield

Smithfield Foods, Inc. is the world's largest pork processor and hog producer. The company is based in Smithfield, Virginia and processes 20 million hogs and raises 12 million annually. In 2001, Smithfield became the fifth-largest beef supplier in the United States. Gordian was engaged to advise Smithfield Foods, Inc. with respect to its interest in the pork assets of Farmland Industries after Farmland filed for chapter 11. Farmland had rebuffed Smithfield's interest prior to the Chapter 11 filing.

Together with a bulge bracket investment bank, Gordian advised the Smithfield Executive Committee on, among other things, potential distressed acquisition strategies, valuation and implementation mechanics.

As a result of our advice, Smithfield was able to establish itself as a viable alternative to the standalone Plan of Reorganization that the Debtor sought to implement. Ultimately, Smithfield's tactics limited Farmland's ability to effect a transaction without our client being provided the opportunity to evaluate and price the assets. Smithfield became the stalking horse in a Section 363 auction in the bankruptcy court; along with our co-advisor, we advised Smithfield on the purchase price, transaction structure, the contents of the asset purchase agreement and bid procedures, and bid strategy. Smithfield acquired the Farmland pork assets for a purchase price of $367 million, plus the assumption of $90 million in debt, and the acquisition has been a huge success for Smithfield.