The purchase price of Columbus is approximately $850 million (m) while the business’ total annual sales are approximately $300m 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.
Columbus will continue to operate from California and will report into the Refrigerated Foods segment of Hormel. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US.
It is hoped that this acquisition will help position Hormel Foods as a total deli solutions provider and enhances its other deli brands such as Hormel, Jennie-O, Applegate, and DiLusso.
“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 capitalising 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, flavours and products.
“The acquisition of Columbus will serve as a catalyst for uniting all our deli businesses into one customer-facing organisation,” he added. “This acquisition significantly enhances our scale in the deli by broadening our portfolio of products, customers and consumers. The synergies we can unlock with this acquisition are clear and I’m excited for the next evolution of our company.”
Joe Ennen, chief executive officer of Columbus Manufacturing Inc, said: “As a millennial-focused brand, Columbus has generated category-leading growth through a passionate commitment to quality, simplicity, and time-honoured recipes. In Hormel we are joining an organisation whose values and culture perfectly align with our own.”