What is Atlas Holdings, the new owner of Valley-born poultry giant Foster Farms?
With its acquisition this week, Livingston’s Foster Farms has become the second Valley-born, family-owned brand to be bought by a private equity firm this spring.
Foster Farms, purchased by Connecticut-based Atlas Holdings, joins Save Mart, which in late March was acquired by Los Angeles-based private equity firm Kingswood Capital Management LP.
Atlas Holdings was founded 20 years ago and now offers a diverse mix of manufacturing, distribution, service and other businesses. The firm owns and operates some 25 companies that employ about 50,000 workers across more than 300 facilities around the globe — including North and South America, Asia and Europe.
Representatives from Atlas Holdings said the company would not have any additional comment at this time beyond Tuesday’s press release about the Foster Farms acquisition.
“Being owned by private equity is very different than being family owned. Atlas will be liable to stockholders,” said Gökçe Soydemir, the Foster Farms endowed chair of business economics at California State University, Stanislaus. The named endowment has no connection to the company’s sale.
Based in Greenwich, one of the wealthiest communities in Connecticut and home to many financial services companies, the firm owns companies in the aluminum processing, automotive, building materials, capital equipment, construction services, food manufacturing and distribution, packaging, paper, power generation, printing, pulp, supply chain management and wood product industries. According to its website, the company’s assets generate approximately $14.5 billion in revenue annually.
Foster Farms is the company’s second food manufacturing acquisition. In 2019, Atlas acquired Wizards Nuts, which operates as Flagstone Foods out of Minneapolis. The healthy snacks manufacturer has processing plants in Alabama, North Carolina and Texas that focus primarily on making private-label snacks for leading retailers, including nut, dried fruit and trail mix assortments.
Atlas also recently has taken a step into the much-debated world of cryptocurrency, a decentralized system of digital-only currency that utilizes energy-heavy blockchain technology. The firm also backs Greenidge Generation, a cryptocurrency mining company that in 2020 together with Atlas converted a natural gas power plant in upstate New York into a Bitcoin mining operation. The plant reportedly mined around $50,000 daily in the virtual and volatile currency.
The plant has since become a political hot button because of the large amounts of real energy needed to virtually “mine” the cryptocurrency using high-powered computers and servers. A decision on whether it will be allowed to continue its ongoing mining operations will be made later this month, according to Bloomberg.
Atlas reportedly has other cryptocurrency mining projects in development with Greenidge in Texas and South Carolina.
The sale of the poultry processor to Atlas ends 83 years of the Foster family’s ownership of the business. The company, which is the top-selling poultry brand in the West with $3 billion in annual sales, was started by Max and Verda Foster on a small ranch west of Waterford in 1939.
Soydemir said Foster Farms’ purchase by the larger private equity firm will make it more competitive and could increase its price-setting power. He expects there to be some restructuring, both of leadership and its approximately 12,000 production workers.
“Now (Foster Farms) will have more power in terms of setting its own prices,” Soydemir said. “Consumers may be seeing higher prices because of less competition. Though, in the long run, because of restructuring of certain things that may create waste, there would also be savings.”
The brand now joins Save Mart, which announced its acquisition by Kingswood Capital Management LP in late March, to move past its original Valley roots into a new, corporate chapter of its business. Save Mart’s sale ended 70 years of family and Valley-based ownership.
“These two (acquisitions) increase the visibility of Valley companies,” Soydemir said. “Maybe more will be looking for these kind of acquisitions in our region.”
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This story was originally published June 7, 2022 at 5:53 PM.
