Cal-Maine Foods has announced a new joint venture between Eggland's Best, a New Jersey-based egg cooperative, and Land O' Lakes, a national farmer-owned cooperative based in Minnesota, to produce and sell branded specialty eggs.
Pursuant to the terms of the transaction, Eggland’s Best has contributed certain assets, including its trademarks, into a new limited liability company, Eggland’s Best, LLC in which Land O’ Lakes has purchased a 50% membership interest. Eggland’s Best and its subsidiaries will own the other 50% of the LLC. The new joint venture will license both the Eggland’s Best and Land O’ Lakes brands. The transaction was effective April 30, 2012.
Cal-Maine expects to record a one-time gain of approximately $27.0 million, or $1.12 per share, after tax, in the Company’s financial results for the fourth quarter of fiscal 2012, as a result of this transaction.
Commenting on the announcement, Dolph Baker, president and chief executive officer of Cal-Maine Foods stated, “We are very pleased to participate in this new joint venture with Eggland’s Best and Land O’Lakes and believe this transaction will benefit all of the members as well as our customers. This joint venture brings together two respected leaders in the egg business with proven brand recognition and a reputation for quality products. We are excited about the additional opportunities to market and sell specialty eggs, which are an important focus of Cal-Maine’s growth strategy. Specialty eggs have continued to grow in popularity with consumers looking for healthy choices, and have higher and less cyclical retail selling prices. We look forward to extending our market reach in specialty eggs with our new relationship with Land O’Lakes.”
Cal-Maine Foods is primarily engaged in the production, grading, packing and sale of fresh shell eggs, including conventional, cage-free, organic and nutritionally-enhanced eggs. The Company, which is headquartered in Jackson, Mississippi, is the largest producer and distributor of fresh shell eggs in the United States and sells the majority of its shell eggs in approximately 29 states across the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States.
Source: Cal-Maine Foods