Hormel Foods Corp. (NYSE: HRL) has bought foodservice business Fontanini Italian Meats and Sausages for $425 million. The acquisition adds to Hormel Foods’ branded products, and brings a new production facility into the fold.
Fontanini is a family-owned business specializing in “authentic” Italian meats, sausages and other meat products, including pizza toppings and meatballs. Originally doing business as Capitol Wholesale Meats Inc., the target was founded by Oriano Fontanini and his wife Jennie Fontanini. The company intends to leverage Hormel Foods’ growing base of customers in the lodging, restaurant, healthcare, and education sectors. The meats producer will continue to operate from its Chicago-based manufacturing facility and report into Hormel’s refrigerated foods division.
"The Fontanini business perfectly complements our branded foodservice business," states Jeff Baker, group vice president of foodservice at Hormel Foods. "We are excited about this new partnership and our ability to leverage key Hormel Foods resources such as R&D, operations, supply chain and finance to grow this dynamic business.”
Hormel Foods won Mergers & Acquisitions’ Deal of the Year Award in 2013 for the company’s acquisition of Skippy peanut butter from Unilever plc (NYSE:UL) for $700 million. The buyer’s strategy reflects a sea change in the eating habits of Americans to focus on better-for-you foods. To date, the company reports more than $9 billion in annual revenue. The Austin, Minnesota-based buyer owns a plethora of well-known food brands to include: Skippy, Spam, Hormel, Natural Choice, Applegate, Justin’s, and Wholly Guacamole.
Recent middle-market deals involving meat products include: Wynnchurch Capital’s investment in Stampede Meat for its beef and protein products; Conagra Brands Inc.’s (NYSE:CAG) purchase of Thanasi Foods LLC for its hot and spicy meat snacks; and Smithfield Foods Inc.’s (NYSE: SFD) buying of two branded pork and meats brands from Hormel in 2016.