Hormel Foods (HRL) to Sell Clougherty Packing and Other Assets for $145M
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Hormel Foods Corporation (NYSE: HRL) today announced it has entered into a definitive agreement to sell Clougherty Packing, LLC, parent company of Farmer John and Saag’s Specialty Meats, along with PFFJ, LLC farm operations in California, Arizona, and Wyoming to Smithfield Foods, Inc. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals, and is expected to close within 30 days.
“We appreciate the Farmer John, Saag’s and PFFJ employees’ dedication and commitment to their customers and consumers. While the businesses have performed well, they no longer align with our company’s growth strategies,” said Jim Snee, president and chief executive officer. “This divestiture also allows for the integration of the pork processing facility at Farmer John with the majority of the live production operations which supply the facility, and are currently owned by Smithfield. We will work together to ensure a smooth transition for our employees and customers.”
The purchase price was $145 million in cash, subject to working capital adjustments at closing. Farmer John harvests approximately 7,400 hogs per day and, in fiscal 2016, the businesses accounted for approximately $500 million in sales and earnings per share of approximately 3 cents.
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