Acquisition

9 Months Ended

Feb. 29, 2020

Effective on October 20, 2019, the Company acquired certain assets of Mahard Egg Farm (Mahard), relating to its commercial shell egg production, processing, distribution and sales for $45.5 million, including a potential post-closing payment of $1 million. The acquired assets include facilities with current capacity for approximately 3.9 million laying hens and permitted capacity for up to 8.0 million laying hens, a feed mill, pullet raising facilities and related production facilities located in Chillicothe, Texas, and Nebo, Oklahoma, and a distribution warehouse located in Gordonville, Texas. Mahard owned equity interests in the Company's majority owned subsidiary, Texas Egg Products, LLC (TEP). As a result of the acquisition, the Company now owns 93.2% of TEP. The acquired operations of Mahard are included in the accompanying financial statements as of October 20, 2019. Acquisition related costs incurred during the period were immaterial to the financial statements.

Pending the finalization of the Company's valuation, the following table summarizes the preliminary aggregate purchase price allocation for Mahard (in thousands):


Inventory	$	5,276
Property, plant and equipment	38,433
Customer list and non-compete agreement	2,000
Liabilities assumed	(194)
Total purchase price	45,515
Deferred purchase price	(1,000)
Cash consideration paid at closing	$	44,515