Hormel Foods Corporation completed the acquisition of nuts business of The Kraft Heinz Company.
June 06, 2021
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Hormel Foods Corporation (NYSE:HRL) entered into a definitive agreement to acquire nuts business of The Kraft Heinz Company (NasdaqGS:KHC) for $3.4 billion on February 10, 2021. The purchase price is subject to customary adjustments. Under the terms of the agreement, Kraft Heinz will sell its dedicated production facilities located in California, Arkansas and Virginia. The transaction includes the Planters®, NUT-rition®, Planters®Cheez Balls and Corn Nuts® brands. The transaction also includes global intellectual property rights to the Planters brand, subject to existing third-party licenses in certain international jurisdictions, and to the Corn Nuts brand. The business being sold contributed approximately $1.1 billion to Kraft Heinz's net sales for fiscal year 2020.The 2020 EBITDA multiple was 12.5x. Facilities located in California, Arkansas and Virginia and their employees will continue to operate in ordinary course. The acquisition is expected to be financed through a combination of cash on hand, short-term debt and long-term debt.
The transaction is subject to regulatory review and approval. The transaction is expected to close in the first half of 2021. As of March 2, 2021, the transaction is expected to close in calendar second quarter of 2021. As of May 20, 2021, the transaction is expected to complete in June 2021. Operating margins are expected to be accretive to the Grocery Products business in 2022. Stacia Schlosser Ryan of Perella Weinberg Partners and Morgan Stanley served as the exclusive financial advisor while Barbara L. Becker and Saee Muzumdar of Gibson, Dunn & Crutcher LLP served as legal advisor to The Kraft Heinz Company. David Finkelstein and Jeremy Murphy of Citi and Jonathan Levin and Jeff Ponko of Credit Suisse are acting as financial advisors while Michael Stanchfield of Faegre Drinker Biddle & Reath is serving as legal counsel to Hormel Foods Corporation. Stuart Rogers and Robyn Downing of Alston Bird LLP acted as legal advisors for Citigroup Inc. and Credit Suisse Group AG.
Hormel Foods Corporation (NYSE:HRL) completed the acquisition of nuts business of The Kraft Heinz Company (NasdaqGS:KHC) on June 7, 2021.
The Kraft Heinz Company specializes in producing and marketing foodstuffs. The products are skid under the Kraft, Heinz, ABC, Capri Sun, Classico, Jell-O, Kool-Aid, Lunchables, Maxwell House, Oscar Mayer, Ore-Ida, Philadelphia, Planters, Plasmon, Quero, Weight Watchers Smart Ones and Velveeta brands. Net sales break down by family of products as follows:
- sauces and condiments (31.1%);
- cheese and dairy products (15%);
- ambient foods (11.5%);
- frozen and chilled products (11%);
- beverages (11%): soft and energy drinks, juices, coffee, etc.;
- meat and seafood (10.3%);
- confectionery, desserts and bakery products (4.5%);
- nutrition and infant foods (1.6%): cereals, milk, cookies, etc.;
- other (4%).
Net sales break down geographically as follows: the United States (70.2%), Canada (6.6%), the United Kingdom (4.4%) and other (18.8%).
KRAFT HEINZ 
