Pennfield Corp. has found a new buyer.
And, unlike its original buyer, this one is a known quantity. A very well-known quantity.
Pennfield disclosed late last week that it has agreed to sell two of its three mills to Cargill Inc. for $8.5 million.
Cargill, founded in 1865, is a global powerhouse that posts annual sales of $133.9 billion and employs 142,000 people.
The Minneapolis-based company is no stranger to Lancaster County, having bought Lititz-based Wilbur Chocolate in 1992 for $51 million.
Lancaster-based Pennfield is a provider of dairy and other types of animal feed. It filed for bankruptcy reorganization in October to cope with mounting losses, after enduring rounds of downsizing.
Initially, the company agreed to sell all three of its mills to a startup company, Wellsource Nutrition, for $15.6 million.
As part of the bankruptcy process, any other suitors were welcome to make offers. No other bids were made, so the deal with Wellsource was approved by the bankruptcy court.
Wellsource, though, never delivered the money.
Earlier last month, Pennfield declared Wellsource in default and put itself up for sale again. At that time, Pennfield expressed confidence that it would be able “to define its next steps within a short term.”
Eight days later, in a bankruptcy court filing, Pennfield said it had the deal with Cargill — the nation’s largest privately held firm.
In a statement released Wednesday, Pennfield’s president, Arnie Sumner, said, “We believe that Cargill will be a good steward of the business going forward, building on Pennfield’s superior product quality and our strong commitment to customer service. We also are confident that Cargill has the resources to close the sale quickly and efficiently.”
Unlike the Wellsource deal, however, the Cargill deal includes only Pennfield’s feed mills in Mount Joy, Lancaster County, and Martinsburg, Blair County.
It excludes the feed mill in South Montrose, Susquehanna County, which presumably remains for sale.
Pennfield’s court filings and press release offered no explanation of why Cargill passed on acquiring the South Montrose mill.
Pennfield said Cargill was one of two companies to make an offer in the wake of the Wellsource deal’s collapse.
Pennfield did not name the other bidder.
The Cargill deal also excludes Pennfield’s 165-acre farm in York County and a 3.1-acre property in Rohrerstown, Lancaster County.
Wellsource, led by a Carlisle feed-industry veteran, was not interested in those either.
And as with the Wellsource deal, the Cargill deal needs bankruptcy court approval to go forward.
Pennfield is seeking a court hearing on Jan. 17 to decide the issue.
If another bidder wants to top the Cargill deal, that suitor would have until the hearing to make its offer.
Pennfield is a 93-year-old firm with headquarters on Erin Court, off Rohrerstown Road in Lancaster County.
With 112 employees, Pennfield is owned by the Horn family, led by retired CEO Ernest O. “Mike” Horn III.
Recent years have been hard for Pennfield.
Pennfield has lost money in four of the past five years, including a $3.4 million net loss on sales of $210.8 million in 2011.
Its annual losses have exceeded $3 million for the past three years, according to its bankruptcy court filings.