LANCASTER Pa. — Pennfield Corp. announced Thursday that it has entered into an asset purchase agreement with Carlisle Advisors LLC through its subsidiary company Wellsource Nutrition Inc.
Under the agreement, Wellsource would acquire substantially all of the assets of Pennfield’s operating business, including animal feed mills located in Mount Joy, Martinsburg and South Montrose, Pa.
To facilitate the sale, Pennfield has filed voluntary petitions under chapter 11 with U.S. Bankruptcy Court in the Eastern District of Pennsylvania. The company believes the expedited sale process should be completed in 90 days or less.
“We evaluated a number of different restructuring options and concluded that a Chapter 11 Section 363 sale was the most effective path for Pennfield,” said Arnie Sumner, Pennfield president.
The Section 363 sale process is subject to an auction process in which other interested parties will have an opportunity to bid on the Pennfield business.
Pennfield expects its operations to continue without interruption during the Chapter 11 process and said its customers will not experience any changes in services or quality.
Pennfield said it has secured adequate financing to fund its operations during the Chapter 11 proceedings, including working capital and letter of credit requirements upon court approval.
Pennfield has filed the customary “first-day” motions to support operations without interruption. For vendors, the law provides suppliers with a priority basis for goods and services moving forward.
Restructuring began earlier this year with the sale of the Pennfield Hempfield mill and workforce reorganization.
Wellsource Nutrition is acquiring and building feed and agronomy assets in Pennsylvania, Ohio, New York and New England. Wellsource will be a fully integrated agricultural business with grain handling, mineral and pre-mix manufacturing, and agronomy production arms in the region.
Pennfield is being advised by Lakeshore Food Advisors LLC as investment banker; Skadden Arps, Meagher & Flom LLP and Maschmeyer Karalis P.C. as legal counsel; and AEG Partners as financial adviser.