Case Study

Smithfield Foods

CLIENT: Smithfield Foods

Gordian Group acted as financial advisor to Smithfield Foods during its acquisition of certain pork assets of Farmland Foods in connection with Farmland’s bankruptcy.

Business Profiles


Smithfield had been interested in purchasing the pork business of Farmland Industries, ("Farmland"), which it viewed as very valuable, but Farmland had consistently rebuffed Smithfield’s interest. However, Farmland was forced to file for Chapter 11, which opened the door for Smithfield to make its desired acquisition. Farmland was attempting to effect its own internal plan or reorganization with the goal of emerging from bankruptcy in substantially the same form, at least with respect to its business and operations. A successful reorganization and exit from Chapter 11 by Farmland would all but kill Smithfield’s chances of affecting its desired transaction.


Gordian Group, together with a bulge bracket investment bank already hired by Smithfield, advised the Smithfield Executive Committee on, among other things, potential distressed acquisition strategies, valuation, implementation mechanics and how to derail Farmland’s internal reorganization efforts in order to force a sale of its pork business. Most notably, we advised Smithfield on how to align itself with a key party. Teaming up with a party whose recovery was at risk—in this case, the Unsecured Creditors Committee—would best position Smithfield to become an active participant in this case and establish itself as a viable alternative to the stand-alone POR. Ultimately, Smithfield’s tactics frustrated Farmland’s ability to effect either a reorganization or a sale of the pork business without our client being provided the opportunity to evaluate and price the assets.


Smithfield became the stalking horse in a Section 363 auction in the bankruptcy court; along with our co-advisor, we advised Smithfield on the purchase price, transaction structure, the asset purchase agreement and bid procedures, and bid strategy. Smithfield acquired the Farmland Foods pork assets for $364 million, plus the assumption of $90 million in pension liabilities.