Hormel Foods to Buy Applegate for $775M
Organic meat company Applegate announces an agreement with Hormel Foods, Inc. to become an independently operated, stand-alone subsidiary.
"Over the last 28 years Applegate has brought transparency and clean ingredients to American favorites and classics like hot dogs, bacon and deli meat," says Stephen McDonnell, Applegate founder. "It was my mission from the start to change the way we think about meat – how it's raised and produced – and this agreement is definitely a continuation of that mission."
McDonnell founded Applegate in 1987, and the company has experienced exponential growth in the exploding organic and natural food market. Applegate sells a wide variety of natural and organic meat products including deli meats, hot dogs, bacon, sausages, frozen breaded chicken and pre-packed lunch kits. There are currently more than 140 Applegate products sold in stores nationwide. Applegate is a pioneer in making antibiotic-free and humanely raised meat available nationwide.
McDonnell will serve as an advisor, and Kerry Collins, the company's current CEO, will continue in her role for the next several months. The company's headquarters will remain in Bridgewater, New Jersey, and all employees retained. They added that they view Hormel's acquisition as an opportunity to not only grow Applegate's presence, but also expand the natural and organic food movement.
"Applegate's consumers won't see any changes," said Collins. "Our products, standards, mission and focus will remain the same. We're going to continue to make noise to change the food system for the better. When Applegate first started, there were only a handful of antibiotic-free animal farms, and today we work with nearly 1,800 family farms. With Hormel Foods as a partner, Applegate can share our expertise on a much wider scale."
"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," says Gina Asoudegan, Applegate's senior director of Mission. "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."
Under the agreement, Applegate will operate as a separate, stand-alone subsidiary, which allows the company 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.
"A growing number of consumers are choosing natural and organic products. This deal allows us to expand the breadth of our protein offerings to provide consumers more choice," says Jeffrey M. Ettinger, chairman of the board, president and chief executive officer at Hormel Foods. "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."
The agreement is expected to close within 60 days from signing, which occurred on May 26, 2015. The purchase price is approximately $775 million, and its selling shareholders are McDonnell and Swander Pace Capital.
Credit Suisse is acting as financial advisors to Hormel Foods and Faegre Baker Daniels is serving as legal counsel. Goldman Sachs & Co. is serving as financial advisor to Applegate in connection with this transaction and Ballard Spahr LLP and Fried Frank are serving as legal counsel.
"Over the last 28 years Applegate has brought transparency and clean ingredients to American favorites and classics like hot dogs, bacon and deli meat," says Stephen McDonnell, Applegate founder. "It was my mission from the start to change the way we think about meat – how it's raised and produced – and this agreement is definitely a continuation of that mission."
McDonnell founded Applegate in 1987, and the company has experienced exponential growth in the exploding organic and natural food market. Applegate sells a wide variety of natural and organic meat products including deli meats, hot dogs, bacon, sausages, frozen breaded chicken and pre-packed lunch kits. There are currently more than 140 Applegate products sold in stores nationwide. Applegate is a pioneer in making antibiotic-free and humanely raised meat available nationwide.
McDonnell will serve as an advisor, and Kerry Collins, the company's current CEO, will continue in her role for the next several months. The company's headquarters will remain in Bridgewater, New Jersey, and all employees retained. They added that they view Hormel's acquisition as an opportunity to not only grow Applegate's presence, but also expand the natural and organic food movement.
"Applegate's consumers won't see any changes," said Collins. "Our products, standards, mission and focus will remain the same. We're going to continue to make noise to change the food system for the better. When Applegate first started, there were only a handful of antibiotic-free animal farms, and today we work with nearly 1,800 family farms. With Hormel Foods as a partner, Applegate can share our expertise on a much wider scale."
"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," says Gina Asoudegan, Applegate's senior director of Mission. "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."
Under the agreement, Applegate will operate as a separate, stand-alone subsidiary, which allows the company 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.
"A growing number of consumers are choosing natural and organic products. This deal allows us to expand the breadth of our protein offerings to provide consumers more choice," says Jeffrey M. Ettinger, chairman of the board, president and chief executive officer at Hormel Foods. "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."
The agreement is expected to close within 60 days from signing, which occurred on May 26, 2015. The purchase price is approximately $775 million, and its selling shareholders are McDonnell and Swander Pace Capital.
Credit Suisse is acting as financial advisors to Hormel Foods and Faegre Baker Daniels is serving as legal counsel. Goldman Sachs & Co. is serving as financial advisor to Applegate in connection with this transaction and Ballard Spahr LLP and Fried Frank are serving as legal counsel.