USA – Oregon Potato Company (OPC) has secured an agreement to acquire assets of NORPAC Foods, a grower-owned fruit and vegetable cooperative in Oregon, US.
NORPAC is Oregon’s largest fruit and vegetable processor and has three processing facilities in the Willamette Valley, along with a subsidiary Hermiston Foods in Hermiston, Oregon and a subsidiary Quincy Foods in Quincy, Washington.
NORPAC anticipates the transaction will move swiftly and close within the next two to three months. During that time current management will continue to lead operations supported by debtor-in-possession (DIP) financing provided by CoBank.
Shawn Campbell, chief executive of
NORPAC Foods said: “NORPAC is pleased to have found a partner who shares our
vision and will ensure the best possible future for our growers, employees,
customers, and partners.”
“Our business operations will continue as normal through the bankruptcy process while our 2,700 employees will continue to receive their wages and benefits.”
Shawn added that NORPAC’s vendors and suppliers will be paid in the ordinary course of business going forward.
Frank Tiegs, President of Oregon Potato Company commented, “We intend to work as quickly as possible through the forthcoming process.
“We are excited about bringing the growers, employees, partners and various assets of NORPAC together with our family of companies. The combined businesses will enhance the offerings and service to customers across all business channels.”
The transaction is subject to customary closing conditions, federal regulatory and Bankruptcy Court approvals. According to bankruptcy documents, Oregon Potato Co. is expected to pay all amounts due to growers for the 2019 crop.
NORPAC hired a financial advisory company in May 2018 to explore its financial and strategic alternatives, including purchase, merger, consolidation, reorganization, or other transaction of a like nature.
In June, the company contrated a restructuring company that assisted in a comprehensive review of the business and concluded with the asset purchase and sale agreement with Oregon Potato Co.
NORPAC believes that the sale “will generate funds sufficient to pay all secured and priority claims and leave sufficient funds for a meaningful distribution to unsecured creditors.”
NORPAC owes between US$100 million and US$500 million to between 5,000 to 10,000 creditors and owns assets of US$100 million to US$500 million.