Hormel Foods To Buy Applegate For About $775 Mln

(RTTNews) - Hormel Foods Corp. (HRL) said Tuesday that it has agreed to buy Applegate Farms, LLC, owner of the Applegate brand, the No. 1 brand in the natural and organic value-added prepared meats category, for about $775 million.

The deal is expected to close within 60 days.

Applegate will operate autonomously as a standalone subsidiary in Hormel's Refrigerated Foods segment. Applegate has 100 employees located mainly in Bridgewater, New Jersey, and the company will be managed by that core Applegate team plus a few new associates from the parent company who will relocate to Bridgewater. Applegate has strategic relationships with a diverse set of manufacturers and processors who draw from about 1,800 family farms.

Applegate 2015 annual sales are expected to be about $340 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 about 7 to 8 cents per share in fiscal 2016.

Hormel Foods expects the acquisition to be accretive to company growth targets.