SALEM, Ore. (AP) — Agribusiness entrepreneur Frank Tiegs will expand his Northwest food processing empire with the planned purchase of most of the assets of the NORPAC farmers' cooperative for about $149.5 million.
The transaction is expected to close in October as part of NORPAC's Chapter 11 bankruptcy filing, which will allow the company to remain operational while restructuring debt, the Capital Press reported .
Tiegs, whose Oregon Potato Co. is acquiring NORPAC, said he was drawn to buy the processor because of the "premium" green beans grown in the Willamette Valley, as well as the broccoli, cauliflower, zucchini, squash and other crops.
"We'll probably add back some of the crops they discontinued and maybe some additional," Tiegs said. "We will try to buy as much as we can and process as much as we can and be a grower-friendly company."
The Willamette Valley Fruit Co. in Salem is already one of the 15 processing companies owned by Tiegs and he expects to use NORPAC's facilities to process blackberries, Marionberries, blueberries and strawberries grown in the valley.
The purchase will include NORPAC's Oregon facilities in Brooks and Salem as well as its plant in Quincy, Washington. Tiegs said he'd like to buy the Stayton facility as well but is still conducting financial and environmental evaluations of the operation.
As a farmer with more than 100,000 acres under cultivation, Tiegs said he's looking forward to working with the cooperative's members to turn the business around.
"I wouldn't be doing it if I didn't think it would work fine," he said.
Over 140 farmer members own the NORPAC cooperative, which was founded in 1924 and is the biggest frozen fruit and vegetable manufacturer in the Northwest with about $310 million in annual sales.
The company contracts with 220 growers across more than 40,000 acres in the region and has about 1,125 full-time employees and 1,100 seasonal employees during peak harvest season.
Shawn Campbell, NORPAC CEO, said the co-op was pleased to find 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," Campbell said in a written statement. "Our 2,700 employees will continue to receive their wages and benefits, our vendors and suppliers will be paid in the ordinary course of business going forward, and our customers can continue to rely on us for unparalleled produce and products thanks to our family of farmers."
According to bankruptcy documents, Oregon Potato Co. is expected to "pay all amounts due to growers for the 2019 crop" and NORPAC believes 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 $100 million and $500 million to between 5,000 to 10,000 creditors and owns assets of $100 million to $500 million, according to its bankruptcy petition.
Information from: Capital Press, http://www.capitalpress.com/washington