USA – Hormel Foods Corporation, a global branded food company, has reached an agreement to acquire Texas-based pit-smoked meats business, Sadler’s Smokehouse for US$270m.
Hormel Foods said that it does not intend to change the operation headquarters of Sadler’s Smokehouse. Smokehouse will continue operations from the Henderson, Texas, facility and will report into the Refrigerated Foods segment.
The transaction was structured as an asset sale and is expected to close in March 2020, subject to customary closing conditions, according to statement by Hormel Foods.
“Sadler’s Smokehouse is a great company with an impressive history, talented team and an outstanding portfolio of on-trend products that resonate with consumers, customers and operators,” said Jim Snee, chairman of the board, president and chief executive officer at Hormel Foods.
“This is a very strategic acquisition for our foodservice business and it gives us another successful brand to expand into the retail and deli channels.”
“Hormel Foods has an excellent reputation as one of the best food companies in the world,” said Harold J. Sadler, owner, Sadler’s Smokehouse.
“We are excited for our employees and family knowing Hormel Foods will continue the Sadler family legacy.”
While presenting results for the first quarter of fiscal 2020, the company said that it plans to immediately upgrade some of Sadler’s production facilities.
Hormel Foods reported net sales of US$2.4 billion, up 1% while its profit for the three months ended was US$242.9 million, up nearly 1% from a year ago.
However, the company said that its retail business has received a slight bump in sales of shelf-stable products in China, including Spam and Skippy peanut butter. Executives cited strength in its turkey and refrigerated-foods businesses.
“The Refrigerated Foods business model performed as anticipated, given the volatile commodity market conditions. Growth was driven by another strong quarter from our foodservice team and higher commodity profits,” Jim said.
“Volatile pork and beef trim prices also impacted profitability across many product lines in Grocery Products.”
Despite the challenges, Hormel reaffirmed its full-year net sales and earnings guidance at at US$1.69 to US$1.83 per share.