The Enid News and Eagle, Enid, OK

Economic Development 2011

February 13, 2011

Only the names have changed

Growth, a positive future the only outcomes Advance Pierre officials expect from merger

ENID — Last year’s merger of Advance Food Co., Advance Brands and Pierre Foods to form Advance Pierre Foods will lead to further growth of the company, officials say.

“Everything is positive right now,” said Mark Allen, president of food service for Advance Pierre Foods. “Right now, we are still working on the integration of all three companies. We’re still integrating cultures, procedures and policies of three companies.”

Advance Pierre Foods will offer a full line of packaged sandwiches, fully cooked chicken and beef products, Philly-style steak, breaded beef, pork, and poultry and bakery products.

Headquartered in Cincinnati, Advance Pierre Foods will operate protein processing facilities in Oklahoma, Ohio and Iowa, as well as sandwich assembly facilities in North Carolina, Ohio and South Carolina. The company will also operate bakeries in North Carolina and Oklahoma.

The merger came about after Advance Food Company saw its steady growth begin to slow.

“Since about 1993 we experienced a very significant growth in our company,” Allen said. “Our company was able to achieve this type of growth because the type of employees and work ethic we have.”

Allen credits the employees’ pride in the company for its success prior to the merger.

“In 2007, for the products we make we could see we reached a little bit of a plateau,” he said. “In 2009 we started exploring acquisition opportunities.”

He said the company’s growth was “almost the same” between 2008 and 2010 and did not compare to growth the company had experienced throughout the past two decades.

Allen said the company acquired an Iowa company named Whitaker Foods, but inclusion of the company did not spur growth as much as it was thought it would because of Advance Food Co.’s size.

“I don’t think we really realized how big our company was ...,” Allen said. “We were going to have to do something more substantial in nature.”

Allen said it was in the best interest of the employees to begin thinking about making a larger acquisition.

“We started pursuing the strategy of being in an equity partnership, and we interviewed many firms,” Allen said. “It just so happened one of the equity firms owned Pierre Foods. Oaktree brought us a two for one.”

Oaktree Capital Management, L.P., owns Pierre Foods, which manufactures foods similar to Advance but took their products through different distribution channels.

“We decided to proceed with a merger because we had a lot of common practices and a lot of common products,” Allen said. “In the merger, Advance Food acquired some 500 new Pierre customers and Pierre gained some 1,500 Advance accounts.”

With the merger and combination of customer bases, Advance Pierre Foods now covers most of the United States.

“It is a lot easier to sell an existing customer more products than to cultivate a new customer,” Allen said. “We’re starting to have some of those discussions now with customers, and we’re seeing some real positive results from those conversations.”

He said the merger, and partnerships built through it, should bring back growth the company has come to expect.

“The intent of the new company is to bring on more mid-sized companies to grow the company to $2 billion annual sales,” Allen said. “We fully expect that we will make several acquisitions in the next few years. With the capital Oaktree has we can look at a lot of acquisitions we might not have viewed as possible.”

With some 1,800 employees, Advance Pierre Foods remains the largest employer in Enid.

Allen said the company will continue to rely on its employees to continue its success.

“The attitude and the drive our employees have is always to grow and have more opportunities and challenges,” he said. “There hasn’t been any layoffs, there hasn’t been any change.”

Allen said the company could begin another acquisition as early as this summer.

“We’ll complete this integration this summer and then will begin another acquisition,” Allen said. “Enid will be an anchor of this company. Half the employees are here, half of the facilities are here.”

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Economic Development 2011
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