Ballard Spahr is representing Applegate, the nation’s leading natural and organic meat company, in a $775 million transaction that would make it an independently operated, stand-alone subsidiary of Hormel Foods. An agreement between the two companies was signed on May 26 and is expected to close within 60 days.
Applegate’s selling shareholders are Stephen McDonnell and Swander Pace Capital. Under the agreement, Applegate will operate as a separate, stand-alone subsidiary, which allows it to leverage Hormel Foods’ vast resources while continuing its mission-driven focus on providing consumers nationwide with meat that is antibiotic-free, humanely raised, and organic.
“Over the last 28 years Applegate has brought transparency and clean ingredients to American favorites and classics like hot dogs, bacon, and deli meat,” said Stephen McDonnell, Applegate founder. “It was my mission from the start to change the way we think about meat – how it’s raised and produced – and this agreement is definitely a continuation of that mission.”
Mr. McDonnell founded Applegate in 1987, and the company has experienced exponential growth in the organic and natural food market. Applegate sells natural and organic meat products including deli meats, hot dogs, bacon, sausages, frozen breaded chicken, and pre-packed lunch kits. Currently, there are more than 140 Applegate products sold in stores nationwide.
Mr. McDonnell will serve as an adviser to the company and Applegate CEO Kerry Collins will continue in her role for the next several months. The company’s headquarters will remain in Bridgewater, New Jersey, and all employees will be retained. Company executives said they view the Hormel acquisition as an opportunity to grow Applegate’s presence and expand the natural and organic food movement. Applegate will continue to support labeling and transparency on genetically engineered foods, limiting the use of antibiotics in animal agriculture, and advocating for the advancement of humane standards.
“A growing number of consumers are choosing natural and organic products. This deal allows us to expand the breadth of our protein offerings to provide consumers more choice,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer at the Austin, Minnesota-based Hormel Foods. “The Applegate team has built a great brand, and consumers can rest assured there will not be any changes to the way Applegate meats are raised and produced. Together, we can provide a faster path to expanded offerings in this high-growth category.”
The Ballard Spahr team was led by Business and Finance Senior Counsel Richard J. Braemer and included Lynn E. Rzonca, Wayne R. Strasbaugh, Brian M. Pinheiro, Leslie E. John, Shannon D. Farmer, Jane E.R. Siegfried, Christopher A. Jones, Andrea T. Oller, David A. Haworth, Robert S. Kaplan, Diane A. Thompson, and Christopher W. Welsch.
Source: www.ballardspahr.com
