AN already odd story took another strange turn last week, leaving many in the feed industry to wonder what, exactly, the story is behind Wellsource Nutrition.
That seems to be the big question in the ongoing saga of Lancaster, Pa., feed company Pennfield Corp., which announced Dec. 19 that its intended suitor had reneged on an agreement to buy it for $15.6 million.
Pennfield, a 93-year-old, family-owned manufacturer of dairy, equine and specialty feeds, filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania on Oct. 3, aiming to facilitate a sale of assets. The court approved the sale of substantially all of Pennfield's operating assets, including feed mills in Mt. Joy, Martinsburg and South Montrose, Pa., to Wellsource, a subsidiary of Carlisle Advisors (Feedstuffs, Oct. 8).
While Pennfield said it executed and delivered all documents necessary to transfer ownership of its assets to Wellsource on Dec. 14, Wellsource failed to pay the purchase price and is in default under the terms of the asset purchase agreement.
Some industry leaders reacting to the news thought the deal was fishy from the start.
The trouble for many is that not much is known about Wellsource or Carlisle. Industry experts told Feedstuffs that prior to the announcement of plans to buy Pennfield's assets, no one had heard of either Wellsource or Carlisle. What little is known about the company traces back to Carlisle's founder, Ralph Briggs.
Public records and local media reports indicate that Briggs, who currently serves as chief operating officer of Maryland-based Novera Proteins, launched Carlisle in March with the intention of "acquiring and building feed and agronomy assets."
While Briggs did not immediately respond to requests for comment, Novera chief executive officer Tom Haschen stressed that his firm is not involved with Carlisle, Wellsource or Pennfield but that Briggs will continue his involvement with Novera regardless of the Carlisle/Pennfield situation.
Prior to joining Novera, which develops protein technologies for the dairy feed sector, Briggs was director of business development for Land O'Lakes Purina Feeds and at one time was vice president of agricultural group operations for Agway.
In early December, he told the Lancaster Intelligencer Journal that by February, Wellsource would complete six additional dairy feed company acquisitions stretching from Ohio to New England, though he declined to name any of the other firms aside from Pennfield. He also indicated that, at some point, he would leave his post as Novera's COO but would remain a partner in the firm.
In its latest statement on the Wellsource situation, Pennfield said the bankruptcy court had authorized Pennfield to obtain a $2 million debtor-in-possession loan from Wellsource and that Wellsource failed to advance the entire $2 million.
Pennfield began restructuring earlier this year by selling its Hempfield mill (Feedstuffs, April 9) and restructuring its workforce after recording losses in four of the past five fiscal years.
Pennfield president Arnie Sumner called the Wellsource situation a "disappointment" but said "with the assistance of our advisers and other interested parties, we will evaluate our options going forward."
Sumner indicated that Pennfield would approach companies that had expressed an interest in acquiring its assets prior to the Wellsource announcement in October.
"In the meantime, we plan to continue to serve our customers at the same high-quality levels that we always have," Sumner said.