TLDR
- Hormel Foods will acquire chicken processor Brakebush Brothers for about $1.06 billion.
- The deal is set to close in Hormel’s fiscal first quarter of 2027.
- Brakebush generated nearly $1.2 billion in net sales over the past 12 months.
- Hormel expects the deal to boost core profitability starting in fiscal 2028.
- HRL stock rose roughly 1% to 2% on the news Wednesday.
Hormel Foods stock (HRL) climbed as much as 2% on Wednesday after the company announced a $1.06 billion deal to acquire Brakebush Brothers, a chicken manufacturer based in Westfield, Wisconsin. Shares traded near $20.15 in the session following the news.
The maker of Spam and Skippy peanut butter is leaning further into proteins. Brakebush has been family-run since 1925 and produces processed raw and cooked chicken, including patties, wings, and nuggets.
Over the last 12 months, Brakebush pulled in close to $1.2 billion in net sales. That’s a sizable chunk of business for Hormel to fold into its existing portfolio.
Deal Timeline and Financial Impact
Hormel expects the transaction to close during its fiscal first quarter of 2027. The company said the acquisition should start adding to its adjusted earnings per share once it closes.
Beyond the immediate earnings bump, Hormel expects the deal to lift its core profitability beginning in fiscal 2028. That’s the longer-term payoff management is pointing to.
The rationale ties back to a broader shift in consumer habits. People are gravitating toward protein-rich meals as health and wellness trends continue to shape grocery and restaurant choices.
Hormel already owns Applegate, an organic meat processor, so this isn’t its first move to diversify beyond traditional packaged meats. Brakebush adds another layer to that protein-focused lineup.
What This Means for Hormel’s Foodservice Business
The company said the acquisition will strengthen its foodservice platform. That platform is where Hormel sells its protein options directly to restaurants, cafeterias, and other food-service operators.
Hormel pointed to a few specific benefits it expects from the deal. These include improved operator relationships, deeper category expertise, and an expanded direct sales organization.
In plain terms, Hormel wants closer ties with the businesses that buy its chicken products in bulk. Brakebush’s existing customer relationships and sales infrastructure could help speed that up.
The timing comes after a rough stretch for Hormel. Last month, the company cut its annual sales forecast after missing third-quarter sales estimates.
That backdrop makes this acquisition a notable bet on future growth even as recent results have lagged expectations. Investors appear to be giving Hormel the benefit of the doubt for now, based on Wednesday’s stock reaction.
Brakebush’s product lineup, patties, wings, and nuggets, fits squarely into the value-added chicken category. That’s a segment where demand has been climbing as shoppers look for convenient protein options.
Hormel didn’t disclose additional financial terms of the transaction beyond the $1.06 billion price tag. The company also didn’t specify how the deal will be financed.
For now, the focus is on integration timing. Hormel has pointed to fiscal Q1 2027 as the target close date, with profitability gains expected to show up a year later in fiscal 2028.
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