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  • February 2019 (Revised January 2020)
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Pierre Foods Acquisition of Advance Foods (A)

By: Guhan Subramanian and Mike Harmon
  • Format:Print
  • | Language:English
  • | Pages:7
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Abstract

This case (A), and its related cases (B-E), establish a setting to discuss an M&A transaction and some of the key legal contracts that are associated with it. In 2010, private equity backed food manufacturer Pierre Foods is contemplating the acquisition of a key competitor, Advance Foods. The acquisition would be debt financed, and would involve the “rollover” of an equity stake by the selling shareholders. There are five key documents to be negotiated: The Stock Purchase Agreement (Cases B-1, B-2), the Stockholders’ and Registration Rights Agreements (Cases C-1, C-2), the Credit Agreement (Cases D-1, D-2), and the Employment Agreement (Cases E-1, E-2). These agreements have been drafted, but each contain a handful of open business points which the parties need to resolve. The cases look at these open points from the perspective of each of the key parties involved, including Pierre’s majority shareholder, Oaktree Capital Management, the selling shareholders, the target’s management team, and the lenders to the acquisition facility. Overall, these cases can be used to understand the unique elements of a complex corporate transaction, how the key documents allocate risk and value, and how parties may make trade-offs to achieve outcomes that best match their priorities.

Keywords

Mergers and Acquisitions; Contracts; Agreements and Arrangements; Negotiation; Complexity

Citation

Subramanian, Guhan, and Mike Harmon. "Pierre Foods Acquisition of Advance Foods (A)." Harvard Business School Case 919-022, February 2019. (Revised January 2020.)
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About The Author

Guhan Subramanian

Negotiation, Organizations & Markets
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Related Work

    • February 2019 (Revised January 2020)
    • Faculty Research

    Pierre Foods Acquisition of Advance Foods (B-1): Stock Purchase Agreement—Buyer's Perspective

    By: Guhan Subramanian and Mike Harmon
    • February 2019 (Revised January 2020)
    • Faculty Research

    Pierre Foods Acquisition of Advance Foods (B-2): Stock Purchase Agreement—Seller's Perspective

    By: Guhan Subramanian and Mike Harmon
    • February 2019 (Revised January 2020)
    • Faculty Research

    Pierre Foods Acquisition of Advance Foods (C-1): Stockholders' Agreements—Majority Perspective

    By: Guhan Subramanian and Mike Harmon
    • February 2019 (Revised January 2020)
    • Faculty Research

    Pierre Foods Acquisition of Advance Foods (C-2): Stockholders' Agreements—Minority Perspective

    By: Guhan Subramanian and Mike Harmon
    • February 2019 (Revised March 2021)
    • Faculty Research

    Pierre Foods Acquisition of Advance Foods (D-1): Credit Agreement—Borrower Perspective

    By: Guhan Subramanian and Mike Harmon
    • February 2019 (Revised March 2021)
    • Faculty Research

    Pierre Foods Acquisition of Advance Foods (D-2): Credit Agreement—Lender Perspective

    By: Guhan Subramanian and Mike Harmon
    • February 2019 (Revised January 2020)
    • Faculty Research

    Pierre Foods Acquisition of Advance Foods (E-1): Employment Agreement—Employer Perspective

    By: Guhan Subramanian and Mike Harmon
    • February 2019 (Revised January 2020)
    • Faculty Research

    Pierre Foods Acquisition of Advance Foods (E-2): Employment Agreement—Employee Perspective

    By: Guhan Subramanian and Mike Harmon
    • February 2019 (Revised January 2020)
    • Faculty Research

    Pierre Foods Acquisition of Advance Foods (A)

    By: Guhan Subramanian and Mike Harmon
Related Work
  • Pierre Foods Acquisition of Advance Foods (B-1): Stock Purchase Agreement—Buyer's Perspective By: Guhan Subramanian and Mike Harmon
  • Pierre Foods Acquisition of Advance Foods (B-2): Stock Purchase Agreement—Seller's Perspective By: Guhan Subramanian and Mike Harmon
  • Pierre Foods Acquisition of Advance Foods (C-1): Stockholders' Agreements—Majority Perspective By: Guhan Subramanian and Mike Harmon
  • Pierre Foods Acquisition of Advance Foods (C-2): Stockholders' Agreements—Minority Perspective By: Guhan Subramanian and Mike Harmon
  • Pierre Foods Acquisition of Advance Foods (D-1): Credit Agreement—Borrower Perspective By: Guhan Subramanian and Mike Harmon
  • Pierre Foods Acquisition of Advance Foods (D-2): Credit Agreement—Lender Perspective By: Guhan Subramanian and Mike Harmon
  • Pierre Foods Acquisition of Advance Foods (E-1): Employment Agreement—Employer Perspective By: Guhan Subramanian and Mike Harmon
  • Pierre Foods Acquisition of Advance Foods (E-2): Employment Agreement—Employee Perspective By: Guhan Subramanian and Mike Harmon
  • Pierre Foods Acquisition of Advance Foods (A) By: Guhan Subramanian and Mike Harmon
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