On the Street -- MGP Sells Facility
August 24/Atchison, Kansas/Globe Newswire -- MGP Ingredients Inc. (MGPI) announced the sale of its Kansas City, Kan., facility to Sergeant's Pet Care Products Inc. The sale was completed for an initial payment of $3.6 million, with provision for additional earn out payments to be paid over time. The sale includes all equipment used for the production and packaging of pet-related products, which principally include extruded plant-based resins and finished pet treats. MGPI will retain ownership of equipment that is used for the production of the company's Wheatex textured wheat proteins, which are sold for use in meat extension and vegetarian product applications. This equipment is located in a separate section of the facility and will be operated under a toll manufacturing arrangement between Sergeant's and MGPI.
"The divestiture of this facility along with assets related to the manufacture of pet products is a key step in our business transformation process," said Tim Newkirk, MGPI president and chief executive officer. "It supports our strategy to place increased focus on those core areas of our business where we possess the greatest amount of expertise and can deliver the greatest amount of value to the categories we serve."
Newkirk added, "We are very pleased with the acquisition of the Kansas City facility by Sergeant's Pet Care Products, an innovator in the pet industry. We look forward to maintaining our relationship through their involvement in the production of our unique line of Wheatex ingredients."
MGP Ingredients purchased the Kansas City facility, located at 16 Kansas Avenue, in February 2001. It was previously owned by Thompson's Nutritional Technology, Inc. In addition to manufacturing and packaging space and equipment, the facility includes administrative offices, a product testing and quality assurance lab, warehousing and shipping areas, and material storage silos. The entire complex is situated on a 27-acre site. MGPI will retain an underdeveloped portion of the site, representing approximately half of that acreage.
From the August 31, 2009, Prepared Foods E-dition