Hormel Foods to acquire Applegate Farms
"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 Minnesota-based Hormel Foods.
After the takeover, New-Jersey based Applegate, which has 100 employees, will operate independently of Hormel Foods as a standalone subsidiary, and will be managed by the existing management team, in addition to some staff from the parent company who will relocate to New Jersey.
"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’s founder and CEO. "It was my mission from the start to change the way we think about meat – how it is raised and produced – and this agreement is definitely a continuation of that mission."
The acquisition is subject to the usual closing conditions, including the receipt of regulatory approvals in the US, and is expected to close within 60 days.
The deal will cost Hormel Foods $775m, while Applegate’s sales for 2015 are expected to be around $340m.
Last week Hormel announced its second-quarter results, with year-on-year sales up by 2% to a record $2.3bn, and total operating profit up by 29%.
