Smithfield to acquire Farmer John, Saag's from Hormel

by Joel Crews
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Smithfield Foods  
The $145 million deal includes two plants and three farms. 
 

SMITHFIELD, Va. – Smithfield Foods Inc. announced on Nov. 21 its plans to acquire Clougherty Packing LLC, a subsidiary of Hormel Foods Corp., Austin, Minnesota. The deal adds two brands, Los Angeles-based Farmer John and Saag’s Specialty Meats, San Leandro, California, to Smithfield’s portfolio and includes two processing plants as well as and three PFFJ LLC farms in Arizona, California and Wyoming.  The deal is subject to capital adjustments and regulatory approvals, but is expected to close within 30 days.

An integrated pork producer and processor, Clougherty Packing’s Farmer John operation slaughters about 7,400 hogs per day and reported sales of about $500 million in fiscal 2016, according to Hormel. It produces a variety of bacon, hot dog and sausage products and has been in operation since 1931. Saag’s specializes in the production of premium deli meat and sausage products.

Smithfield President and CEO Kenneth Sullivan said the acquisition is part of the company’s strategy to expand operations to include facilities produced and processed on the West Coast. The deal includes the addition of 2,000 employees.

“By folding Farmer John into our operations, we are better positioned to take advantage of our long-term strategic growth goals, which includes an increasingly diversified customer and consumer base and greater supply chain efficiency,” Sullivan said.

Jim Snee, president and CEO of Hormel, said that while the divested businesses have a track record of good performance, “they no longer align with our company’s growth strategies.”

“This divestiture also allows for the integration of the pork processing facility at Farmer John with the majority of the live production operations which supply the facility, and are currently owned by Smithfield. We will work together to ensure a smooth transition for our employees and customers,” Snee said.

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