Jacques Klempf prepared for dinner with the CEO of Cal-Maine Foods Inc. at which they were to discuss an acquisition of Jacksonville-based Dixie Egg Co.
He was staying in an older hotel in Jackson, Miss., where Cal-Maine is based, and one that the nation’s largest egg company used for guests.
He went into the bathroom, the door locked behind him.
With his cellphone handy, he called the hotel and texted the Cal-Maine Foods CEO, a good friend, joking that the company wanted to make sure he did the deal.
“You guys have got me locked in the bathroom,” Klempf texted.
After jiggling the door handle, Klempf was able to get out.
The dinner, the next morning’s full-on meeting with the chief financial officer and general counsel and the conversations that ensued all led to the conclusion.
The letter of intent was announced Aug. 2 and the deal was completed Wednesday.
Klempf, 59, said Monday he and Cal-Maine Foods began talking about a deal in April or May for an acquisition of the 68-year-old Dixie Egg Co.’s parent company, Foodonics International Inc.
With the egg industry a small fraternity, Klempf said he had known the Cal-Maine Foods team a long time. The company had made it known it wanted to be involved if Klempf ever wanted to sell Dixie Egg.
Klempf’s grandfather worked in the business when he immigrated to the U.S. in 1920. His father ended up in Jacksonville and started Dixie Egg in 1948. Klempf became president in 1993 and CEO in 1998.
That time had come, Klempf said, because he did not have a succession plan; he married his wife, Tracy, in early 2015; and his first grandchild was born in July.
Plus, he realized he had built the company to a point that would require financing or outside investors to take it to another level.
He wanted to make sure he could take care of his family with the deal.
“All those variables seemed to be weighing into making this decision,” Klempf said.
While he had talked to investment companies for years about Dixie Egg, he knew they would look for an exit strategy the day they bought in.
“I didn’t feel comfortable that they would keep the company whole and the employees whole,” Klempf said.
So he reached out to Cal-Maine Foods, led by friend Dolph Baker, the CEO.
As a public company, Cal-Maine Foods grows through acquisition. It kept the company whole and Dixie Egg’s almost 300 employees remain on staff.
Klempf is among those who remain. He signed a five-year consulting and noncompete agreement.
“I will be trying to assist them in any way I can,” he said.
The deal wasn’t easy, he said, but “we did make it work.”
He recalls his lawyer, with GrayRobinson, calling as they were trying to close the deal. Cal-Maine Foods was asking about the articles of incorporation for the company in Georgia for 1968.
“I was 11. I have very little recollection of where they would be,” Klempf said.
Leases and other details were discussed, “but we eventually worked through it all and made it happen.”
The purchase price was not disclosed.
Cal-Maine Foods bought substantially all of the assets of Foodonics International and its related entities doing business as Dixie Egg Co., relating to their commercial production, processing, distribution and sale of shell eggs business.
The assets include commercial egg production and processing facilities with the capacity for about 1.6 million laying hens and related feed production in Georgia, Alabama and Florida.
It also includes contract grower arrangements for another 1.5 million laying hens.
Cal-Maine Foods also bought the Egg-Land’s Best Inc. franchise with licensing rights for parts of the markets in Alabama, Florida, Georgia, Puerto Rico, Bahamas and Cuba.
Telling the employees was tough, Klempf said, but he explained the reasons for selling.
“It’s different but they are hanging in there and it looks like things are going to be fine,” he said.
That was emotional and so is walking through the facilities that he formerly owned, “and now somebody else owns them.”
There are bad days, he said, and good days, including his October recognition as egg producer of the year from United Egg Producers.
“It was a nice honor,” he said, and not expected.
In addition to the consulting agreement, Klempf and Cal-Maine Foods also agreed to a joint venture on a chicken-litter fertilizer product.
The manure generated by Dixie Eggs’ hens is sold by the pound to local farmers to build their soil. The venture is an opportunity to make it into a dry, granulated form that also presents some retail opportunities.
As a consultant, he can use his office space at the 5139 Edgewood Court refrigerated warehouse in West Jacksonville, which Cal-Maine Foods acquired.
Soon, though, he expects to move to Southpoint where a new family business is setting up.
BAM Investment Group LLC was created in July. Its board comprises Klempf, his wife and his three daughters.
BAM doesn’t stand for anything specific. It’s a word he used with his daughters as they were growing up, a la Emeril.
He said his oldest child, Alexandria, is president. Their ventures — Forking Amazing Restaurants along with commercial property investments — will operate under BAM, he said.
One of those restaurants, Cowford Chophouse, should open by May, he said. That project is Downtown at Bay and Ocean streets.
Klempf said the Foodonics sale was a good opportunity to transition from running a family-founded company in a third-generation profession.
“I just think the time is right. I’ve embraced it,” he said.
@MathisKb
(904) 356-2466