US – Hormel Foods Corporation has entered into a definitive agreement to acquire California based Columbus Manufacturing, Inc., an authentic, premium deli meat and salami company, from Chicago-based Arbor Investments for a value worth US$850 million.

According to the company, the strategic agreement positions Hormel Foods as a total deli solutions provider and enhances its other strong deli brands such as Hormel, Jennie-O, Applegate, and Di Lusso.

Hormel is famous for its Skippy peanut butter and Spam meat products.

“We are pleased to add Columbus to the Hormel Foods family. Columbus has an outstanding reputation in the food industry and is well-positioned in the advantaged retail deli category,” said Jim Snee, president and chief executive officer at Hormel Foods.

“Columbus is capitalizing on one of the fastest-growing areas in the retail grocery store with premium, authentic products that are on-trend with today’s consumers who are looking for unique experiences, flavors, and products.”

“The acquisition of Columbus will serve as a catalyst for uniting all our deli businesses into one customer-facing organization,” Snee said.

The company has said that the acquisition significantly enhances its scale in the deli segment by broadening its portfolio of products, customers, and consumers. It expects to unlock synergies over the short and long term.

“As a millennial-focused brand, Columbus has generated category-leading growth through a passionate commitment to quality, simplicity, and time-honored recipes,” said Joe Ennen, chief executive officer of Columbus Manufacturing, Inc.

“In Hormel we are joining an organization whose values and culture perfectly align with our own.”

Columbus Manufacturing, Inc.’s annual sales for the last year were about US$300 million, with an expected growth rate in excess of 5%.

Hormel Foods expects this acquisition to be modestly accretive to earnings per share in fiscal 2018 and that full-year accretion in fiscal 2019 should be between 6 to 8 cents per share.

The company will continue to operate from California and will report into the Refrigerated Foods segment.