Hormel acquires US natural and organic meat company Applegate
Posted: 27 May 2015 | | No comments yet
Hormel, a multinational manufacturer and marketer of consumer-branded food and meat products, has entered into a definitive agreement to acquire Applegate…
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US, and is expected to close within 60 days.
“A growing number of consumers are choosing natural and organic products. This deal allows us to expand the breadth of our protein offerings to provide consumers more choice,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer at Hormel Foods. “The Applegate team has built a great brand, and consumers can rest assured there will not be any changes to the way Applegate meats are raised and produced. Together, we can provide a faster path to expanded offerings in this high-growth category.”
Applegate purchase price is around $775million
Applegate will operate autonomously as a standalone subsidiary in the company’s Refrigerated Foods segment.
“Over the last 28 years Applegate has brought transparency and clean ingredients to American favourites and classics like hot dogs, bacon and deli meat,” said Stephen McDonnell, Applegate founder and long-time CEO. “It was my mission from the start to change the way we think about meat – how it’s raised and produced – and this agreement is definitely a continuation of that mission.”
Applegate 2015 annual sales are expected to be about $340 million. The purchase price is approximately $775 million. Including estimated deal costs and fair value adjustments, the deal is projected to be neutral to Hormel Foods earnings per share in fiscal 2015, and accretive by approximately 7 to 8 cents per share in fiscal 2016. Hormel Foods expects this acquisition to be accretive to company growth targets.