A Chicago area company has made an offer that could approach $80 million to buy Cagle's, an Atlanta-based chicken processor that has been in bankruptcy since last fall.
The U.S. Department of Justice must approve the attempt by JCG Foods, affiliated with Koch Foods, to pay cash and take over Cagle's inventory and accounts.
Last October, Cagle's filed Chapter 11 bankruptcy, which allows it to continue operating while trying to get back on its feet or find a buyer.
Cagle's employs about 1,900 workers at facilities in Georgia and Alabama. It is an integrated company, controlling its chickens from the hatchery to shrink-wrapped meat headed for grocery store shelves.
"The plan is to continue operating the facilities," said Mark Kaminsky, the chief financial officer of JCG. "We are not planning on shutting any of them at this time."
If the purchase goes through, JCG may continue using the Cagle name, Kaminsky said.
JCG hopes to close the deal this summer. Koch Foods makes prepared and uncooked chicken for retail sale. It is not related to Koch Industries.
Cagle's began 60 years ago as a poultry shop near Atlanta's Five Points. Last year, it was the 21st largest producer in the U.S., according to the U.S Poultry and Egg Association.
Dropping prices for meat, coupled with rising fuel and feed prices led to company losses, and Cagle's listed more than 1,000 creditors when it filed for bankruptcy. Cagle's stock traded as high as $3.95 a share before the bankruptcy filing, fell to as low as 2 cents a share last January and was trading in the range of $3.16 Tuesday.
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