NEW YORK (TheStreet) -- Tyson Foods Inc. (TSN) has won the bidding war for Hillshire Brands Co. (HSH) and will purchase all outstanding shares of the company for $8.55 billion in cash, or $63 per share.
Tyson Foods has been looking to grow its prepared foods business, and says the acquisition of Hillshire will give the company the top two brands "in numerous categories."
Tyson is expecting the transaction to be "marginally accretive to EPS on a cash basis in the first full fiscal year" following the completion of deal, the company said.
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Shares of Tyson Foods are down -4.44% to $38.34 today.
Separately, TheStreet Ratings team rates TYSON FOODS INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate TYSON FOODS INC (TSN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TSN's revenue growth has slightly outpaced the industry average of 3.7%. Since the same quarter one year prior, revenues slightly increased by 7.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 36.36% and other important driving factors, this stock has surged by 65.31% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TSN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- TYSON FOODS INC has improved earnings per share by 36.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TYSON FOODS INC increased its bottom line by earning $2.32 versus $1.68 in the prior year. This year, the market expects an improvement in earnings ($2.90 versus $2.32).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 124.2% when compared to the same quarter one year prior, rising from $95.00 million to $213.00 million.
- You can view the full analysis from the report here: TSN Ratings Report