Hormel Foods Corp. (NYSE: HRL) has acquired Cidade do Sol, a Brazilian meats company using the Ceratti brand, for approximately $104 million. The deal marks Hormel’s first company acquisition in South America.
"Strategic international growth is important to Hormel Foods and South America has been of interest to us for several years," states Hormel Foods CEO Jim Snee. "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."
Cidade do Sol produces more than 70 “premium” meat products with a variety of flavors. The target distributes ham, sausages, bologna, mortadella, salami and other meat products to the Brazilian retail and foodservice sectors.
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 food and meat products include: Hormel’s purchase of foodservice business Fontanini Italian Meats and Sausages for $425 million; 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.
HT Capital Advisors LLC served as financial adviser to Hormel Foods, while Faegre Baker Daniels LLP and TozziniFreire Advogados acted as legal counsel.