Two years after merger talks between Seneca Foods Corp. and Allens Inc. broke down, the companies have an agreement that will allow Seneca to buy the bankrupt Allens Inc. for $148 million, pending approval from a bankruptcy judge.

Both companies are in the canned food business and buy fresh vegetables and fruit, which are processed and sold under a variety of brands. Seneca has private label products as well as packing for Libby’s, Blue Boy, Stokley’s and Green Giant. Allens is known for its Veg-All label, Popeye canned spinach and the Allens, Princella, Freshlike and Royal Prince brands.

Allens officials, who filed for Chapter 11 bankruptcy reorganization Oct. 28, contend the Seneca deal will be the best bet for creditors, including fresh produce suppliers who are owed money under the Perishable Agriculture Commodities Act. The company has between $20 million and $25 million in PACA claims against it because the statute covers fresh produce regardless of its end use.

“Allens believes that the purchase price … will provide funds well in excess of the amount necessary to satisfy the first priority obligations, the PACA claims and (other claims) … any other transaction will not yield as favorable an economic result,” according to the motion to sell, which was filed Dec. 23.

Officials with Marion, N.Y.-based Seneca Foods Corp. said in a news release Dec. 17 that they had reached an agreement with Allens Inc., Siloam Springs, Ark., for a purchase price of about $148 million, subject to working capital adjustment and the assumption of certain liabilities.

“If the company is ultimately successful in its acquisition of these assets, they will fit with the company’s long-term growth objective to expand its line of canned vegetable offerings to include sweet potatoes, southern vegetables and broaden its offerings of spinach and dry beans,” Seneca officials said in a news release.

Hearings are set in early 2014 in the Allens bankruptcy case so Judge Ben Barry can determine the final bid process in the event other companies are interested in buying the Arkansas company.

Seneca and Allens were poised to seal a deal in 2011, stating in a joint news release in July that year that they had signed a memorandum of understanding. The deal would have made Allens a subsidiary of Seneca, but in early September 2011 the companies terminated negotiations.

Allens started looking for a buyer in early 2013 and retained a firm to help, according to court documents. That firm sent queries to more than 170 potential buyers, with 60 signing non-disclosure agreements to explore possible deals.