Hormel Foods to acquire Brakebush Brothers for $1.055 billion

Hormel Foods Corporation (HRL) said Tuesday it has agreed to acquire Brakebush Holdings, Inc. and Brakebush Brothers, LLC in a deal valued at $1.055 billion in cash, subject to customary adjustments. The company disclosed the transaction in a regulatory filing on Tuesday.

The purchase price represents an implied adjusted EBITDA multiple of 10.7x, or 8.9x after factoring in expected run-rate cost synergies of approximately $20 million by the end of fiscal 2028. Hormel expects the transaction to close during the first quarter of fiscal 2027.

Headquartered in Westfield, Wisconsin, Brakebush is a family-owned, non-vertically integrated chicken provider founded in 1925. The company generated approximately $1.2 billion in net sales over the last 12 months, operating five production facilities and two research and development labs in states including Wisconsin, North Carolina, Texas, Minnesota, and Georgia.

"Brakebush is a highly respected leader in value-added chicken and has earned the trust of customers for more than 100 years through innovation, quality and exceptional relationships," Jeff Ettinger, interim chief executive officer, said in a statement.

"Chicken has been one of the most attractive growth categories in protein, and Brakebush has built an exceptional platform to serve that demand," John Ghingo, president and chief executive officer-elect, said in a statement.

The transaction is subject to customary closing conditions, including the expiration or termination of waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the absence of any law or order prohibiting the deal. The purchase agreement includes a termination date of March 29, 2027, subject to an automatic three-month extension under specified regulatory circumstances.

Hormel plans to finance the acquisition using a combination of cash on hand and long-term debt. The company expects the deal to be accretive to adjusted earnings per share beginning in fiscal 2028 and intends to report Brakebush operations primarily through its Foodservice segment.

Wells Fargo acted as exclusive financial advisor to Hormel Foods, with Faegre Drinker Biddle & Reath serving as legal counsel. William Blair acted as exclusive financial advisor and Michael Best & Friedrich LLP served as legal counsel for Brakebush.