Hormel Foods (NYSE: HRL) has agreed to buy Applegate Farms, an organic and natural meat distributor, for $775 million as consolidation in the packaged foods space continues.  

Applegate had been considered a target thanks to the added appeal of it specializing in natural and organic products. The company, backed by private equity firm Swander Pace, had first hit the auction block in late 2014.  Since then Hormel had reportedly been courting the company as a way to expand the breadth of its protein offerings.

Privately held Applegate, founded in 1987 by its current CEO Stephen McDonnell, produces bacon, sausage, hot dogs and other meat products. The company’s products are promoted as humanely raised and antibiotic free.

Applegate, which is expected to have $340 million in sales this year, will operate autonomously as a standalone subsidiary of Hormel’s refrigerated foods division.

Austin, Minnesota-based Hormel said the Applegate purchase is expected to close within 60 days. The deal is expected to be neutral to Hormel’s earnings per share in its fiscal year 2015, and be accretive to earnings by about 7 to 8 cents per share in fiscal 2016. The deal was announced after the stock market closed.

The purchase of Bridgefield, New Jersey-based Applegate is also the latest of three major deals for Hormel over the past two years, as the packaged food company looks to diversify. The deal tops Hormel’s $700 million purchase of the Skippy peanut butter brand from consumer products giant Unilever—Mergers & Acquisitions' 2013 Deal of the Year.

In 2014, Hormel paid $450 million for CytoSport Holdings, maker of Muscle Milk and other nutritional supplements.

Until Hormel’s recent slate of acquisitions, the company’s largest deal was the 2001 buyout of turkey rival The Turkey Store for $334 million.  

There’s been a wave of acquisitions in the packaged food industry. Golden Valley-based General Mills last year paid $820 million Annie’s Inc., best known for its organic and natural macaroni and cheese. For more, see 6 Notable Food Deals.

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