Source: Tom Johnston, MEATINGPLACE, 10/28/11

In a market that has made U.S. poultry companies ripe for the plucking, Mexican poultry giant Industrias Bachoco announced today it has reached an agreement to acquire Fort Smith, Ark.-based O.K. Industries.

Bachoco said it would continue to operate the acquired company as O.K. Industries Inc., one of the largest vertically integrated poultry companies in the U.S. with assets that include processor O.K. Foods. O.K. has 4,000 employees, production facilities in Arkansas and Oklahoma, processing capabilities of about 2.5 million birds per week and sales near $600 million per year. O.K. supplies retailers, foodservice distributors and commodity customers in the U.S. and abroad.

“This acquisition is one of the most transcendental steps for Bachoco, since it is our first international acquisition and first entry into the U.S. poultry market,” Bachoco CEO Rodolfo Ramos said in a news release. “Bachoco will benefit from the knowledge and expertise of O.K.’s experienced management team, a key reason behind their industry leadership. This will also enable Bachoco to enhance its product offering and regional footprint, while achieving a better understanding of the U.S. chicken market.”

The transaction is subject to government approvals.

It’s been a tough year for O.K., which, like chicken integrators nationwide, has struggled with soaring input costs and lagging chicken demand. In June, O.K. mourned the death of Collier Wenderoth, Jr., the company’s long-time and well-respected chairman and CEO. That was a month after the Supreme Court ordered O.K. to pay $14.5 million to poultry growers who sued, alleging the company used market power to force them into lopsided contracts. The company could not be reached for comment on the Bachoco deal by deadline.

Bachoco’s foray into the United States would follow other foreign companies’ footsteps this year as U.S. firms want for capital. In February, Ukraine’s Omtron Ltd. snatched up Georgetown, Del.-based Townsends Inc., which since has filed for Chapter 7 (liquidation) bankruptcy. In July, South Korea’s Harim USA Inc. acquired Seaford, Del.-based Allen Family Foods during that company’s bid for Chapter 11 bankruptcy protection. The biggest thud came in the fall of 2009, though, when Brazil’s JBS S.A. acquired control of Pittsburg, Texas-based Pilgrim’s Pride Corp.

Bachoco posted net sales of more than $2 billion in the year ended Dec. 31, 2010.

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