Smithfield Foods Inc. announced the completion of the acquisition of Clougherty Packing LLC, parent company of Farmer John and Saag's Specialty Meats brands, and the PFFJ LLC farm operations from Hormel Foods Corp. The closing followed the approval of the sale by the Committee on Foreign Investment in the U.S.
"We are proud to officially welcome Farmer John to our growing Smithfield family — a move that has already created new value for our combined operations and set the stage for a strong 2017," said Kenneth Sullivan, president and chief executive officer of Smithfield Foods. "With this one acquisition, we've created a more efficient supply chain coast to coast and expanded our operations, product portfolio as well as our customer and consumer base."
Smithfield will welcome three farms located in Arizona, California and Wyoming into its hog production division. Kenneth Baptist, vice president of operations for Smithfield's packaged meats division, will now lead Farmer John operations, which includes both the Farmer John and Saag's Specialty Meats brands. Baptist has more than a decade of experience at Smithfield and more than 30 years of experience in the food industry.
The purchase price was $145 million in cash, adjusted for working capital. Farmer John harvests approximately 7,400 hogs per day, and in fiscal 2016, the businesses accounted for approximately $500 million in sales and earnings per share of approximately 3 cents.