Hormel Foods announced a couple of big steps in growth, having acquired two companies to add to its portfolio in the last couple of weeks.
The team just announced it has brought on Cidade do Sol, a growing, value-added meats company in Brazil selling under the Ceratti® brand, for about $104 million USD.
“Strategic international growth is important to Hormel Foods, and South America has been of interest to us for several years,” said Jim Snee, Hormel's President and CEO, in a press release. “The Ceratti brand has a strong family ownership and a rapidly-growing distribution of its portfolio of value-added products. This acquisition is a strategic fit for Hormel Foods, provides us an initial entry into the Brazilian market, and will serve as a platform for future growth in South America.”
The company offers more than 70 products in 15 categories including authentic meats such as mortadella, sausage, and salami for Brazilian retail and foodservice markets.
“The acquisition of the Ceratti brand allows us to enter the fast-growing Brazilian market with a premium brand,” said Larry Vorpahl, Group VP of Hormel Foods and President of Hormel Foods International Corporation. “The Ceratti brand is poised for continued growth given its strong reputation in the market and outstanding products. This acquisition allows us to establish a full in-country presence with an excellent team of professionals in sales, marketing, operations, logistics and accounting. We are committed to continued international expansion and, with the addition of the Ceratti brand, our global footprint will continue to grow.”
Mauro Preti, CEO of Cidade do Sol, said the team was proud to become part of the Hormel Foods family.
“Hormel Foods has a strong reputation with values that align closely with the values we have built throughout our 85-year history,” Preti said. “They share an unwavering focus on product quality, state-of-the-art technology, and transparency. Hormel Foods acquisition of the Ceratti brand provides the resources of a global company and will allow us to facilitate our plans for expansion and growth.”
Last week, Hormel also acquired Fontanini Italian Meats and Sausages, longtime purveyor of branded line of Italian meats and sausages items. Fontanini, Hormel noted on an earnings call for its Q3, 2017 report, enhances its branded Hormel foodservice and Burke Pizza toppings businesses.
“This acquisition also gives us more production capacity and allows us to avoid major capital expenditures at our current facilities,” said Snee on the call. “We intend to integrate Fontanini into the refrigerated foods group over the next six to nine months. We do not plan to operate Fontanini as a standalone subsidiary, but instead integrate the plant into our Refrigerated Foods operations group and their sales force into our Hormel foodservice division. The integration will allow us to attain significant synergies.”
The transaction was structured as an asset sale with a purchase price of $425 million, according to a separate release, subject to customary working capital adjustments.
Despite a near miss on expectations for its most recent quarter, Hormel Foods clearly has a lot up its sleeve. As more unfolds, Deli Market News will be sure to keep you in the loop.