Foley is pleased to announce that the firm’s representation of AgFeed Industries Inc. (AgFeed) in its sale under Section 363 of the U.S. Bankruptcy Code to Murphy-Brown LLC (Murphy-Brown) and TriOak Foods Inc. (TriOak) has been recognized by The M&A Advisor as the Sec. 363 Sale of the Year (Over $50mm to $100mm). The nominations, representing more than 500 participating companies, were judged by an independent jury of industry experts. The M&A Advisor announced the winners of the 8th Annual M&A Advisor Turnaround Awards on January 22, 2014.
Section 363 of the United States Bankruptcy Code provides a basis for a debtor to sell assets outside the ordinary course of business, and such sales have well-proven procedures designed to maximize value, while providing reasonable protections to the original “stalking horse” bidder.
On July 15, 2013, AgFeed entered into an agreement with the stalking horse bidder, The Maschhoffs LLC, with a purchase price of $67 million, after taking into account a working capital adjustment. When no single comprehensive competitive bidder had stepped forward, AgFeed’s team selected a consortium bid from two competitors: Murphy-Brown and TriOak. The ensuing auction lasted 14 hours and featured 35 rounds of bidding. At the end, AgFeed received a $79 million bid from Murphy-Brown and TriOak. The sale netted $79 million in cash proceeds to AgFeed, approximately 24 percent more than the net value offered by The Maschhoffs LLC. In a separate 363 sale that concluded in December, the China operations of AgFeed Industries Inc. were sold to Ningbo Tech-Bank Co Ltd and its subsidiary, Good Charm International Development Ltd., publicly listed in China on the Shenzhen Stock Exchange.
Business Development Asia (BDA) acted as the exclusive financial advisor to AgFeed, with Mackinac Partners LLC serving as AgFeed’s restructuring advisors. Keith Maib acted as the CRO and the law firm of Young Conaway Stargatt & Taylor, LLP also served as legal counsel. The Foley team was led by Zhu Julie Lee, Mark T. Plichta, Selig D. Sacks, and Michael J. Small.