Hillshire Brands Tyson confirms deal for HSH at $63/shr in cash valued at $8.55B; as speculated earlier
- The all-cash transaction is valued at approximately $8.55 billion, including Hillshire Brands' outstanding net debt, and represents a multiple of 16.7x trailing 12 months adjusted EBITDA or 10.5x including $300 million in synergies.
Tyson anticipates the substantial cash flow from the combined companies will enable it to rapidly pay down debt.
- Tyson would expect to realize annual synergies in excess of $300 million driven primarily by operational efficiencies, purchasing, distribution, supply chain efficiencies, upgrading raw materials and through the combination of the two companies' talented sales and marketing teams and alignment of shared service functions. Synergies are expected in the first full fiscal year with the total synergies to be realized by the end of year three.
- Tyson's pork processing operations would benefit from stable and consistent demand for its raw materials for use in Hillshire Brands' branded, value-added products.
- Tyson expects that the proposed transaction would be marginally accretive to EPS on a cash basis in the first full fiscal year after completion and substantially accretive thereafter.