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BUSINESS ACQUISITIONS | 12 Months Ended
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Dec. 25, 2022
Business Combination and Asset Acquisition [Abstract] |
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS Pilgrim’s Food Masters On September 24, 2021, the Company acquired 100.0% of the equity of the Kerry Consumer Foods’ meats and meals businesses, collectively known as PFM, for cash of £698.8 million, or $958.9 million. The acquisition was funded with the Company’s recent senior notes offering and borrowings under the credit facility. The acquisition solidifies Pilgrim’s as a leading European food company. The specialty meats business is a leading manufacturer of branded and private label meats, meat snacks and food-to-go products in the U.K. and the Republic of Ireland. The ready meals business is a leading ethnic chilled and frozen ready meals business in the U.K. The acquired operations are included in the Company’s U.K. and Europe reportable segment. Transaction costs incurred in conjunction with this acquisition were approximately $19.3 million. These costs were expensed as incurred and are reflected within SG&A expense in the Company’s Consolidated Statements of Income. The results of operations of the acquired business since September 24, 2021 are included in the Company’s Consolidated Statements of Income. Net sales and net income generated by the acquired business during 2022 totaled $1.0 billion and $8.4 million, respectively. The assets acquired and liabilities assumed in the acquisition were measured at their estimated fair values as of September 24, 2021 as set forth below. The excess of the purchase price over the fair value of the identified net assets was recorded as goodwill in the Company’s U.K. and Europe reportable segment. The factors contributing to the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the acquisition as well as the assembled workforce. Benefits include (1) complementary product offerings, (2) an enhanced footprint in the U.K. and the Republic of Ireland and (3) an enhanced position in the fast-growing plant-based protein, direct-to-consumer and hot food-to-go markets. The goodwill is not expected to be tax deductible for tax purposes. The fair values recorded for the assets acquired and liabilities assumed for the acquisition are as follows (in thousands):
Cash and cash equivalents | $ | 113 |
Trade accounts and other receivables | 7,387 |
Inventories | 60,341 |
Prepaid expenses and other current assets | 1,727 |
Operating lease assets | 14,648 |
Property, plant and equipment | 247,133 |
Identified intangible assets | 415,157 |
Other assets | 335 |
Total assets acquired | 746,841 |
Accounts payable | 4,615 |
Other current liabilities | 407 |
Operating lease liabilities | 18,996 |
Deferred tax liabilities | 114,701 |
Other long-term liabilities | 2,612 |
Total liabilities assumed | 141,331 |
Identified net assets | 605,510 |
Goodwill | 353,397 |
Total consideration transferred | $ | 958,907 |
The valuation of intangible assets of $415.2 million consisted of: 1) trade names with indefinite lives of $214.0 million; 2) trade names of $36.8 million with useful lives ranging from 15 years to 20 years; and 3) customer and distributor relationships of $164.3 million with useful lives ranging from 15 years to 18 years. The following unaudited pro forma information presents the combined financial results for the Company and PFM for 2022, 2021 and 2020 as if the acquisition had been completed at the beginning of 2020:
| 2022 |  | 2021 |  | 2020
| (In thousands, except per share amounts)
Net sales | $ | 17,468,377 |  |  | $ | 15,442,724 |  |  | $ | 13,023,345 |
Net income attributable to Pilgrim's Pride Corporation | 746,599 |  |  | 19,389 |  |  | 92,991 |
Net income attributable to Pilgrim's Pride Corporation per common share - diluted | $ | 3.11 |  |  | $ | 0.08 |  |  | $ | 0.38 |
The above unaudited pro forma financial information is presented for informational purposes only and does not purport to represent what the Company’s results of operations would have been had it completed the acquisition on the date assumed, nor is it necessarily indicative of the results that may be expected in future periods. Pro forma adjustments include depreciation on the provisional values of acquired property, plant and equipment, amortization on the provisional values of acquired intangible assets, interest expense on debt issued to finance the acquisition, acquisition-related costs incurred by Pilgrim’s and its subsidiaries and the related income tax effect of these adjustments. Pro forma adjustments exclude cost savings from any synergies resulting from the acquisition. Randall Parker Foods Limited On November 12, 2021, the Company acquired 100.0% of the equity of Randall Parker Foods Limited and its subsidiaries (together “RPF”) from several sellers for £10.0 million, or $13.4 million. The acquisition was funded with cash on hand. Transaction costs were immaterial, these costs were expensed as incurred and are reflected within SG&A expense in the Company’s Consolidated Statements of Income. The acquired operations include lamb processing and retail packaging operations and will connect the Company’s existing lamb supply chain, bringing its farmers and customers closer together. The RPF operations are included in the Company’s U.K. and Europe reportable segment.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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