SILOAM SPRINGS, AR (KNWA) -- A cash-strapped canning company in Siloam Springs may soon have a new owner. Allens Canning filed for Chapter 11 bankruptcy in October, and Tuesday the company announced its entered into a purchase agreement with Seneca Foods, which is based in New York. According to a press release, Seneca has agreed to pay $148 million for all Allens assets through a court-supervised buying process, during which Allens Canning will operate as usual.
You can read more on this new development in the news release from Allens below:
(News release) - Allens today filed a revised motion seeking authorization from the United States Bankruptcy Court for the Western District of Arkansas (the "Court") to conduct an auction pursuant to Section 363 of U.S. Bankruptcy Code. The motion also sets out the proposed bidding procedures for the auction. Pursuant to the asset purchase agreement, Seneca will serve as the "stalking horse bidder" with an agreement to acquire substantially all of the Company's canning operations for $148 million in cash subject to certain adjustments. The asset purchase agreement sets the floor for the auction, which is designed to achieve the highest or otherwise best offer.
The Company noted that it has received interest from several financial and strategic bidders, many of whom are expected to be active participants in the auction. Throughout this court-supervised sales process, Allens will continue to operate the business in the ordinary course, focusing on its core canned vegetable markets.
"We are pleased to reach this agreement with Seneca and to begin a court-supervised sales process intended to maximize the value of Allens," said Jonathan Hickman, Chief Restructuring Officer of Allens. "We are encouraged by the interest Allens has received and are committed to an outcome that provides the most value for our creditors. I would also like to thank our talented employees - the interest we are seeing in our business is a direct reflection of their continued hard work and dedication."
Allens is seeking a hearing from the Court to approve proposed bidding procedures and bid protections to set deadlines for interested parties to submit qualified bids to acquire substantially all of the Company's assets and to set dates for an auction and sale hearing related to the sale.
As previously announced, Allens is also actively pursuing a sale of its frozen vegetables business in Montezuma, Georgia, which specializes in frozen breaded vegetable products and Southern-style frozen vegetables. The Company expects to sell those assets through separate application to the Court.
The Company filed voluntary Chapter 11 petitions on October 28, 2013. Additional information is available at www.allens-restructuring.com. Court filings and other documents related to the reorganization proceedings are available on a separate website administered by Allens' claims agent, Epiq Systems, at http://dm.epiq11.com/allveg.
Alvarez & Marsal is serving as Allens' Chief Restructuring Officer and Lazard Middle Market is serving as its investment banker. Greenburg Traurig and Mitchell Williams are serving as legal advisors.
About Allens, Inc.
Allens Inc., a national leader in canned and frozen vegetables since 1926, is family owned and operated in Siloam Springs, AR. Every Allens vegetable is proudly grown and packed in North America. Allens vegetables are sold nationally and internationally with manufacturing plants throughout the Midwest, Midsouth, and Southeast.
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