Recently, the world’s largest cattle feeder, JBS, agreed to pay a $10.3 billion fine to settle accusations of making illegal payments to feedyard owners. Although the fine will have an impact on the company’s business, it is clear that JBS will be continuing its operations. Although it has agreed to pay the fine, JBS will continue to buy cattle from feed yards associated with its Five Rivers Cattle Feeding operations.
JBS Five Rivers Cattle Feeding is the largest cattle feeder in the world
Pinnacle Asset Management has acquired the assets of JBS Five Rivers Cattle FeedING, the world’s largest cattle-feeding company. The company has 11 feed yards across six states. The feed yards have long-term agreements with several beef plants and are now part of Pinnacle. The deal is valued at about $200 million. The deal is subject to regulatory approval and Pinnacle must obtain the required funding.
Pinnacle Asset Management, L.P. is the largest alternative asset manager in the world. It is located at 712 Fifth Avenue in New York City, three blocks south of Central Park. The firm is headquartered in Oklahoma City. The sale of Five Rivers marks the end of JBS’s presence in North America. Pinnacle owns two other cattle-feeding companies, including OneSix Farms, which has operations in Brazil.
JBS Five Rivers Cattle Feeding will continue to operate as usual
JBS USA announced in June that it will sell its stake in Five Rivers Cattle Feeding, the world’s largest beef cattle feedyard. The sale was approved by the company’s board of directors following a $3.1 billion settlement related to bribery allegations in Brazil. Few people believed JBS would sell its U.S. assets after agreeing to settle a bribery scandal in Brazil.
JBS USA plans to sell its massive cattle feeding operation, which spans five states and Canada and supplies beef to its U.S. packing plants. The operation is the largest feeding operation in the world. Pinnacle Asset Management is the new owner of the U.S. assets of Five Rivers Cattle Feeding, which has a $1.8 billion inventory. JBS USA has ten beef packing plants in the U.S. and Canada, including one in Brooks, Alta.
The transaction has been completed. Pinnacle Investments has purchased Five Rivers Cattle Feeding from JBS. The company is led by Mike Thoren, who is currently CEO of the feedlot. Pinnacle, which focuses on commodities-based investments, is also partnering with Arcadia Asset Management, which was founded by Jordan Levi, a co-founder of the Fed Cattle Exchange. The companies also have a strategic relationship with Ospraie Management.
JBS will continue to purchase cattle from feed yards associated with Five Rivers Cattle Feeding operations
In addition to the feed yards that are part of the sale, JBS will continue to purchase cattle from other ranchers that are affiliated with Five Rivers Cattle. The company has 11 feedyards in Kansas, Nebraska, Oklahoma, and Texas that will supply the beef processing plants of JBS USA. This transaction is expected to close in the first quarter of 2018.
Although the sale is directly linked to the scandal in Brazil, the transaction puts the company in a better position for its planned IPO later this year. Cattle feeding has faced a number of challenges over the past decade but the improvement in 2017 is encouraging. In 2010, the company began a $18 million renovation of its Kuner feedyard east of Greeley, Colorado. It then purchased a feed yard in Arizona and one in Alberta.
The company is also selling its shareholding in Vigor Alimentos S.A., which owns a 19.2% stake in the operation. The sale is part of JBS’ global strategy and its aim to maintain its competitive edge in the global food industry. The company plans to use some of the proceeds from the sale to reduce its debt levels in Brazil.
