Hormel Foods Corporation has closed on its acquisition of leading natural and organic prepared meats company Applegate Farms LLC. Hormel Foods initially announced its intent to buy Applegate Farms in May.
Among Applegate Farms’ products are turkey deli meat, chicken strips, breaded chicken, hot dogs, bacon, breakfast and dinner sausage, corn dogs and pork.
As a growing number of consumers choose natural and organic products, this purchase provides Hormel Foods and the Applegate brand a faster path to expanded offerings in this high-growth category, the company stated. Applegate will operate autonomously as a stand-alone subsidiary in the Hormel Foods Refrigerated Foods segment.
The 2015 annual sales for Applegate 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.
Headquartered in Austin, Minnesota, Hormel Foods is also the parent company of Jennie-O Turkey Store, Spam, Saag’s, Stagg Chili, Dinty More, Chi-Chi’s, Don Miguel and Farmer John, among others.