July 4, 2024

By Lynda Kiernan-Stone, Global AgInvesting Media

Cal-Maine Foods, the largest producer and distributor of fresh shell eggs in the U.S., is continuing to expand its national footprint with the acquisition of ISE America for approximately $110 million in cash. 

Eggs are one of the most commonly used animal proteins. Global egg production has almost doubled over the past 20 years with expectations that it will reach 138 million tons per year by 2030. And this acquisition will serve to only strengthen Cal-Maine’s already strong position in a category that is forecast to grow from a value of US$13.74 billion in 2022 to US$16.2 billion in 2028, reflecting a CAGR of 2.79 percent. 

This deal adds about 4,000 acres of land to Cal-Maine’s holdings, along with commercial shell egg production and processing facility with current capacity of approximately 4.7 million laying hens, including 1 million cage-free and 1.2 million pullets, feed mills, inventories, and egg products breaking facility.

Included along with these assets is an extensive customer distribution network that spans across the U.S. Northeast and Mid-Atlantic states, and production operations in Maryland, New Jersey, Delaware, and South Carolina. 

“We are excited about the opportunity to significantly enhance our market reach in the Northeast and Mid-Atlantic states with the acquisition of these assets from ISE,” said Sherman Miller, president and CEO, Cal-Maine Foods. “The added production and distribution capabilities will allow us to serve new customers and expand capacity, particularly in the Northeast, which is largely a new territory for Cal-Maine Foods. We are also acquiring production assets for the first time in Maryland, New Jersey and Delaware.”

In operation for nearly 100 years, ISE America is a totally integrated egg laying and production operation that also conducts further egg processing including fresh frozen eggs, liquid eggs, and hard-cooked eggs. The company’s domestic distribution network reaches 15 U.S. states, and its exported egg products ship to destinations in Asia, Canada, and the Middle East.

“ISE has a long history in the egg production business and enjoys a solid reputation in the marketplace,” said Miller. “We will continue to honor this important legacy as we build new connections and customer relationships. Cal-Maine Foods has a strong record of driving value from our acquired operations with a proven operating model.”

“We welcome the dedicated ISE operations team to the Cal-Maine Foods family and look forward to a successful integration. Working together, we have a unique opportunity to deliver greater value to both our customers and shareholders.”

This deal bringing in ISE America comes only months after Cal-Maine’s recent agreement to acquire shuttered assets belonging to Tyson Foods consisting of a broiler processing plant, hatchery, and feed mill located in Dexter, Missouri.

At the time, Cal-Maine stated that once the transaction is closed in its third fiscal quarter, the company plans to invest $13 million to convert the assets from chicken processing into an egg processing facility – a project that is expected to create approximately 96 jobs. 

Additionally, in connection with the deal, Cal-Maine expects to enter into agreements with certain former Tyson contract farmers to convert their operations to align with Cal-Maine’s cage-free, free range, or pasture-raised egg production operations. 

Geographic expansion is a key strategic element for Cal-Maine – something which both the deal for ISE America and for the Tyson assets gain for the company.

“We are pleased to announce the proposed acquisition of the assets of Tyson’s former broiler processing facility in Dexter, Missouri,” said Miller in January of this year when Cal-Maine announced its deal with Tyson Foods. “This transaction is consistent with our growth strategy to expand our business through selective acquisitions in addition to our organic growth initiatives.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News. She can be reached at lkiernan-stone@globalaginvesting.com.

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