AUSTIN, Minn. -- Hormel Foods Corp. has announced that it has entered into an agreement to acquire Applegate Farms LLC, a leading natural and organic meat company and owner of the Applegate brand, for approximately $775 million.
“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,” said Jeffrey M. Ettinger, chairman, president and CEO of 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.”
Under the agreement, Applegate will operate as a separate, standalone subsidiary in Hormel’s Refrigerated Foods segment. Applegate has 100 employees located mainly in Bridgewater, N.J., and the company will be managed by this core Applegate team plus a few new people from the parent company who will relocate to Bridgewater.
“Over the last 28 years, Applegate has brought transparency and clean ingredients to American favorites and classics like hot dogs, bacon and deli meat,” said Stephen McDonnell, Applegate founder and longtime CEO. “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 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."
Gina Asoudegan, Applegate's senior director of mission, said, "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. 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."
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals, and the companies expect the deal to close within 60 days. Applegate said it expects 2015 annual sales to be about $340 million.
Hormel Foods, based in Austin, Minn., is a multinational manufacturer and marketer of consumer-branded food and meat products.
Bridgewater-based Applegate has been producing natural and organic hot dogs, bacon, sausages, deli meats, cheese and frozen products for more than 25 years.
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