Cal-Maine acquires egg producer for $110 million to expand Northeast presence

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Dive Overview:

• Cal-Maine Foods, the largest U.S. egg producer, last week acquired ISE America, one of the top 25 egg producers, for $110 million in cash.
• The acquisition will give Cal-Maine access to ISE’s facility, which covers approximately 4,000 acres and houses 4.7 million laying hens, 1 million of which are cage-free. Cal-Maine will also gain a feed mill and an egg product crushing facility, according to a press release.
• Sherman Miller, Cal-Maine's president and CEO, said the acquisition will help the egg producer expand its production capacity in the underserved Northeast region. The deal includes production assets in Delaware, Maryland and New Jersey.

Dive Insights:

Miller said the acquisition will deliver greater value to Cal-Maine's shareholders and further validate the egg production giant's operating model.

“ISE has a long history in the egg production business and a solid reputation in the marketplace,” Miller said. “We will continue to honor this important legacy as we build new connections and customer relationships.”

The purchase follows other acquisitions by Cal-Maine in recent years to expand its operations. In January, the company announced it had purchased an egg-grading facility in Missouri that was previously owned by Tyson.

Mississippi-based Cal-Maine has been hit hard by the volatility in the egg sector. The company had a record profit in early 2023 as egg prices surged due to avian influenza. But in April, the company halted operations at its Texas facility after the virus was found in a flock. The discovery led to a loss of about 2 million birds. Adding more birds would further expand the company’s egg production capacity.

In its most recent earnings report in April, Cal-Maine reported net sales of more than $703 million, a 30% year-over-year decline due to lower egg prices. Miller said in a news release that while egg prices continue to rise due to avian influenza, the overall impact on eggs is not as severe as it was in 2023.