Applegate Farms to be acquired by Hormel
Steve’s breakdown: Between this acquisition and that I think they’ve jumped-the-shark with the successful steroid guy campaign with the line “What’s in your sandwich”, their account could change hands.
BRIDGEWATER, NJ: Hormel Foods Corporation (NYSE: HRL) today announced that it has entered into a definitive agreement to acquire Applegate Farms, LLC (“Applegate”), owner of the Applegate® brand, the No. 1 brand in the natural and organic value-added prepared meats category. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the United States, and is expected to close within 60 days.
“Over the last 28 years Applegate has brought transparency and clean ingredients to American favorites and classics like hot dogs, bacon and deli meat”
“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 will operate autonomously as a standalone subsidiary in the company’s Refrigerated Foods segment. Applegate has 100 employees located primarily in Bridgewater, New Jersey, and the company will be managed by this core Applegate team plus a few new folks from the parent company who will relocate to Bridgewater. Applegate has strategic relationships with a diverse set of manufacturers and processors who draw from approximately 1,800 family farms.
“Over the last 28 years Applegate has brought transparency and clean ingredients to American favorites 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.
Credit Suisse is serving as exclusive financial advisor to Hormel Foods in connection with this transaction. The selling shareholders are Stephen McDonnell and Swander Pace Capital.
For more information on Applegate, please visit http://www.applegate.com/.
About Hormel Foods
Hormel Foods Corporation, based in Austin, Minn., is a multinational manufacturer and marketer of consumer-branded food and meat products, many of which are among the best known and trusted in the food industry. The company leverages its extensive expertise, innovation and high competencies in pork and turkey processing and marketing to bring branded, value-added products to the global marketplace. The company is a member of the Standard & Poor’s (S&P) 500 Index, S&P 500 Dividend Aristocrats for 2014, was named the 2013 Sustainable Supply Chain of the Year by Refrigerated & Frozen Foods magazine, and was again named one of “The 100 Best Corporate Citizens” by Corporate Responsibility Magazine for the seventh year in a row. Hormel Foods was also recognized as a 2015 Military Friendly Employer by G.I. Jobs magazine, on the 2015 Best for Vets Employers List by Military Times, and was named one of the 2015 40 Best Companies for Leaders by Chief Executive magazine. The company enjoys a strong reputation among consumers, retail grocers, foodservice and industrial customers for products highly regarded for quality, taste, nutrition, convenience and value. For more information, visit http://www.hormelfoods.com.