NutraCea Sells Non-Core Cereal Ingredients Business to Kerry
The assets to be sold include certain equipment located in NutraCea's Phoenix plant as well as related customer and supplier lists and purchase orders related to the cereal ingredients business.
17 Feb 2010 --- NutraCea, a world leader in stabilized rice bran (SRB) nutrient research and technology, announced that it has signed an asset purchase agreement to sell NutraCea's existing cereal ingredients business and certain related equipment to Kerry, Inc., a global food ingredients company in a transaction valued at approximately $3.9 million plus the actual cost of NutraCea's inventory related to its cereal ingredients business. The assets to be sold include certain equipment located in NutraCea's Phoenix plant as well as related customer and supplier lists and purchase orders related to the cereal ingredients business. Neither the Phoenix plant nor any of the manufacturing assets located in the Company's Dillon, Montana facility are included in the transaction.
At Closing, Kerry and NutraCea will enter into a Toll Processing agreement whereby until the earlier of the date Kerry begins production of cereal products using the assets purchased under the Purchase Agreement and October 31, 2010, NutraCea will produce for Kerry cereal products at NutraCea's Dillon, Montana plant.
Completion of the asset sale is subject to a variety of customary closing conditions, including, among other things, the absence of a material adverse effect on the purchased assets between the date of the agreement and the closing date and the approval of the transaction by the U.S. Bankruptcy Court. The asset sale is also subject to the consideration of higher or better offers which must be submitted and approved in accordance with bid procedures as approved by the Bankruptcy Court.
Furthermore, NutraCea agreed that it will not process or sell certain cereal products for a period of five years from the closing of the asset purchase agreement.
W. John Short, Chairman & CEO of NutraCea, commented "The sale of our cereal ingredients business to Kerry is a further step in the repositioning of NutraCea, as we concentrate on our core businesses of stabilized rice bran, rice bran oil and nutraceutical and pharmaceutical applications derived from stabilized rice bran."
On November 10, 2009 NutraCea filed for court supervised protection to restructure its operation under Chapter 11 of the US Bankruptcy Code.
