News & Insights

A Perfect Match

Background

Jack Link’s Beef Jerky is the #1 meat snack in the United States and fastest-growing meat snack manufacturer worldwide. With such demand for its product, Jack Link’s needed more beef and more production facilities to feed its customers.

Located in Brazil, JBS SA is the world’s largest protein producer with expansion coming from an impressive array of acquisitions. These acquisitions left JBS with some interesting, but underutilized, business assets, most notably jerky production facilities in Santo Antonio de Posse and Lins, in the State of São Paulo, Brazil, and another meat snack production facility in Mankato, Minnesota.

Jack Link’s was under pressure to get raw material and production capacity to feed its loyal customers. JBS was seeking to solidify a high-growth customer while simultaneously exploiting its underutilized jerky production facilities. Each party had the power to provide specific value to the other’s business, so these discussions formed the basis for a multifaceted joint venture relationship.

Our Involvement

As counsel for Jack Link’s Beef Jerky, Freeborn & Peters guided the company through an intricate legal structure and a host of business and legal issues that are fundamental to a multi-year, multifaceted, cross-border manufacturing partnership. The firm provided guidance to an understanding regarding control and financial mechanisms for the venture, as well as developing exit strategies for each party in the event the venture did not meet expectations. Production quantities, price terms, quality standards and regulatory concerns were all negotiated. Variables outside of either party’s control, including the regulatory environment (both in the United States and Brazil), currency differences and fluctuations in commodity prices needed to be addressed.

Results

On September 13, 2010, Jack Link’s Beef Jerky and JBS jointly announced that they reached an agreement formalizing a comprehensive relationship. Under the terms of the deal, JBS supplies the raw material at market prices to the joint venture. The parties jointly operate the facilities in Brazil. The venture jointly sells the product to Jack Link’s Beef Jerky for further processing, packaging and distribution in the United States and elsewhere. Proceeds from the joint venture are shared 50/50. In addition, Jack Link’s acquired the meat snack manufacturing facility in Mankato, Minnesota from JBS.

Share

Related Attorneys And Or Firm Professionals

Client

Link Snacks

Related Industry