Hormel Foods Corp. has inked a deal to acquire Applegate Farms LLC, producer of the No. 1 brand in the natural and organic value-added prepared meat category, for about $775 million. The deal is expected to close within 60 days, subject to customary closing conditions and regulatory approvals.
"A growing number of consumers are choosing natural and organic products," explained Jeffrey M. Ettinger, chairman of the board, president and CEO at Austin, Minn.-based Hormel. "This deal allows us to expand the breadth of our protein offerings to provide consumers more choice. 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."
Bridgewater, N.J.-based Applegate will operate independently as a stand-alone subsidiary in Hormel's refrigerated foods segment; according to Applegate, this arrangement will enable it "to continue its mission-driven focus while taking advantage of Hormel Foods' vast resources to make natural and organic meat more available and accessible to consumers." Applegate will retain all 100 of its current employees, with the addition of a few people from the parent company.
Applegate founder and former CEO McDonnell will serve as an adviser, and Kerry Collins, the company's current CEO, will remain in her role for the next several months. There are currently more than 140 Applegate products sold in stores nationwide, and the brand is a pioneer in making antibiotic-free and humanely raised meat more easily available at retail.
"Applegate will continue to support labeling and transparency on genetically engineered foods, limiting the use of antibiotics in animal agriculture, and advocating for the advancement of humane standards," said Applegate Senior Director of Mission Gina Asoudegan. "As a company, Applegate will continue to lead the way in searching for solutions on issues like non-GMO feed for naturally raised livestock and raising the bar on animal welfare."
Applegate’s 2015 annual sales are expected to be about $340 million. Hormel expects the acquisition to be accretive to its growth targets.