By: Jeff Kiger, Post-Bulletin
November 2, 2017
AUSTIN — Hormel Foods announced a deal today to buy a “millennial-focused” meat firm for $850 million to expand its deli offerings.
Austin-based Hormel has reached an agreement to buy Columbus Manufacturing Inc., “an authentic, premium deli meat and salami company,” from Chicago-based Arbor Investments. The deal is expected to close within 60 days.
Columbus sells premium meats, including chicken, turkey, pork and beef.
“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,” Hormel CEO Jim Snee said in today’s announcement.
Columbus reports annual sales of about $300 million.
This deal follows on the heels of two other Hormel acquisitions in August. It bought Chicago-based Fontanini Italian Meats and Sausages for $425 million. Hormel also purchased Brazilian sausage and salami maker Cidade do Sol for $104 million to enter South America.
Hormel said Columbus will continue to operate from Hayward, Calif., where it has two facilities. It will become part of Hormel’s refrigerated foods segment.
Hormel said it expects the acquisition to be “modestly accretive” to its earnings in fiscal 2018. In fiscal 2019, Hormel expects the deal to add 6 cents to 8 cents to its earnings per share.