JBS to sell US-based Five Rivers cattle business for US$200m

USA – Brazilian meat producer JBS has announced plans to sell its US-based Five Rivers, the world’s largest cattle feeder to Pinnacle Asset Management in a US$200 million deal.

Pinnacle Asset is an investment firm specializing in commodities and natural resources and is set to buy the cattle feeder that supplies JBS with beef for its US processing plants.

Last year, JBS was planning on a divestment plan that involved the sale of Five Rivers Cattle Feeding that comprises 11 feedlots and has a total feeding capacity estimated at 980,000 head of cattle.

As part of the purchasing agreement, Five Rivers Cattle Feeding will continue to supply cattle to JBS USA’s beef processing plants.

The current Five Rivers management team will also remain in place, with president and CEO Mike Thoren staying in his lead role.

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“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.

The CEO also confirmed that the transaction was approved by JBS S.A. board of directors and that it put the country at a more favourable position for future opportunities.

“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.

The partners said they were focused to continuing the legacy of best-in-class production, livestock care and animal welfare, and environmental stewardship.

“The long-term partnership with Pinnacle will ensure JBS USA’s continued ability to produce high-quality beef products, including natural, certified humane, rose without antibiotics, source-verified and traditional products, enjoyed by customers and consumers around the world,” Nogueira said.

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The deal gives Pinnacle 11 feedlots in Arizona, Colorado, Idaho, Kansas, Oklahoma and Texas, with feeding capacity for more than 900,000 head of cattle.

Pinnacle, which focuses on commodities-based investments plans to run the Five Rivers business in an operating partnership with Oklahoma City-based cattle feeding firm Arcadia Asset Management.

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