Minnesota-based meat and processed food group Hormel Foods has announced that it has completed its acquisition of Provena Foods, the California-based pasta and pepperoni producer.
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Hormel, which is paying around US$12m for Provena – in Hormel stock – as well as assuming around $6m in debt, forecasts annual sales in the region of $60m from its new subsidiary.
“Our acquisition of Provena Foods further strengthens the capabilities within our refrigerated foods business segment,” said Jeffrey M. Ettinger, Hormel’s chairman, president and CEO. “We have the number one position in pepperoni at retail and a growing position in meat toppings and pepperoni products in foodservice. This acquisition will enhance that aspect of our business by providing additional production capacity.”
Under the terms of the deal, each outstanding share of Provena common stock has been converted into the right to receive 0.08 shares of Hormel Foods common stock, with around 296,000 Hormel Foods shares expected to be issued to current Provena shareholders.
The deal includes two production facilities in California, one in Lathrop and the other in Chino. Both of these will now become wholly owned operations, reporting through Hormel’s refrigerated foods division.
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By GlobalDataFounded in 1878 and now listed on the American Stock Exchange, Provena Foods produces pepperoni and pasta, and sells to pizza producers and packaged food companies. The company operates throughout the US, but is primarily concentrated in the west of the country.
