Austin / MN. (hrl) Hormel Foods Corporation, a leading global branded food company, announced that it has entered into a definitive agreement to acquire the «Planters» snack nut portfolio from the Kraft Heinz Company. The proposed transaction is expected to close in calendar Q2 2021, subject to regulatory review and approval. The acquisition includes the «Planters», «NUT-rition», «Planters» Cheez Balls and «Corn Nuts» brands. Hormel Foods will acquire the business for USD 3.35 billion in cash in a transaction that provides a tax benefit valued at approximately USD 560 million, equating to an effective purchase price of USD 2.79 billion.
«’Planters’ is an iconic leading snack brand with universal consumer awareness,» said Jim Snee, chairman of the board, president and chief executive officer of Hormel Foods. «The acquisition of the «Planters» business adds another USD 1 billion brand to our portfolio and significantly expands our presence in the growing snacking space. The «Planters» brand enhances our portfolio built for individual and social snacking occasions, and perfectly complements our snacking brands such as «Hormel Gatherings» , «Columbus» , «Justin’s» , «Skippy», «Herdez» and «Wholly» . This acquisition also meaningfully broadens our scope for future acquisitions in the snacking space.»
«Our competencies in brand stewardship, revenue growth management, e-commerce, innovation and consumer insights will be key to driving growth for the «Planters» brand and for our customers,» Snee said. «We also expect significant synergies as we integrate this business into our One Supply Chain and Project Orion system.»
The «Planters» snack nut portfolio net sales were approximately USD 1 billion in calendar year 2020 and are expected to grow at the company’s long-term organic growth target. Operating margins are expected to be accretive to the Grocery Products business in 2022 and enhance margins and cash flows for the total company. Hormel Foods expects to attain synergies of approximately USD 50-60 million to be realized by 2024. The acquisition includes three dedicated production facilities located in California, Arkansas and Virginia.
«The acquisition of the« Planters» branded business further demonstrates our disciplined financial approach to M+A,» said Jim Sheehan, executive vice president and chief financial officer of Hormel Foods. «We expect this acquisition will responsibly leverage our balance sheet and will not compromise our disciplined capital allocation policy, especially our commitment to dividend growth.»
