Hormel Foods Corporation announced a deal on Wednesday to acquire Brakebush Brothers from the Brakebush family for approximately $1.06B. Brakebush Brothers is a privately held, family-owned producer of value-added chicken headquartered in Westfield, Wisconsin, founded in 1925, generating approximately $1.2 billion in annual sales, with roughly 90% of revenue coming from foodservice. Hormel expects to report Brakebush results primarily in its foodservice segment, with the deal expected to be accretive to adjusted EPS beginning in FY28 and closure expected in the first quarter of FY27. On a conference call about the deal, Hormel CFO Ash Bhumbla said Brakebush brings proven capabilities in value-added chicken, an attractive growth profile, and strong customer relationships. Barclays analyst Benjamin Theuer called the acquisition a strategically attractive expansion of Hormel's foodservice business, saying it will likely strengthen the company's long-term growth profile and significantly increase its presence in chicken, though he noted the market will likely focus on the acquisition multiple and near-term increase in leverage. Shares of Hormel are down 15.8% on a year-to-date basis.
Hormel Foods CorporationHormel agrees to acquire Brakebush Brothers for ~$1.06B, expected accretive to adjusted EPS from FY28 and expanding its foodservice chicken business.
Barclays PLC