eMerge Interactive Acquires Livestock Marketing Companies

In two deals valued at just over $42 million in cash and stock, eMerge Interactive,Inc. Tuesday moved to accelerate national scaling of its chain integration strategy for the U.S. beef industry.

eMerge (EMRG) is acquiring the sales and support infrastructure of Louisville, Ky.-based Eastern Livestock Co., and Jordan Cattle Auction of San Saba, Texas.

Eastern Livestock Co., Inc., incorporated in 1982, is a privately-held cattle dealer and marketing company doing business in virtually every cattle-producing state in the nation. In 1999, the company marketed more than 2 million head of cattle, making it the largest organization of its kind in the nation.

Jordan Cattle Auction operates auction markets in San Saba, Brownwood and Mason, Texas. It was one of the first companies of its kind to commercialize cattle-health certification — a process that includes prescribed weaning and vaccination schedules as well as electronic identification and tracking of individual cattle throughout the production chain. Introduced to customers at Jordan’s first Premium Stocker and Feeder sale in 1999, this certification model increases the value of animals in lots large and small, enhances efficiency and lays the foundation for closed-loop sharing of performance information.

eMerge Chief Executive Officer Charles Abraham said the acquistions set eMerge apart from traditional market-makers who simply connect buyers with sellers.

eMerge already has many components of its value chain integration process in place in its Web-enabled CattleinfoNet information network, Abraham said, including a private historical livestock database, robust information systems, a rapidly growing e-marketplace and technologies that enable the industry to more effectively add value to its product.

Abraham said Eastern Livestock has an industry-wide marketing network already in place, and eMerge will overlay CattleinfoNet’s e-commerce platform, information network and technologies on the organization, “optimizing our combined performance to continue creating the largest virtual marketplace in the American beef business.”

He said Jordan Cattle’s cattle-health certification concept adds antoher critical dimension to eMerge’s Value Chain Integration process because the firm has demonstrated that thoroughly documented quality process adds value and enhances margins. He noted that ranchers using this system are earning premiums averaging $60 a head over market price for their cattle.

“By merging Jordan’s premium-sale model with Eastern’s large-volume capabilities and our own information infrastructure and value-enhancing technologies, we’re not only dramatically increasing our market reach; we’ll also be helping the industry, on a national scale, achieve the enhanced margins attainable only through beef certification and branding.”

News Around the Web