Deal includes brands, processing facilities and three farms.

Krissa Welshans 1, Feedstuffs Editor

November 22, 2016

2 Min Read
Smithfield to acquire Clougherty Packing from Hormel
Smithfield Foods

Smithfield Foods Inc. has begun the process to acquire Clougherty Packing LLC from Hormel Foods Corp. Through this agreement -- which is expected to be completed within a month, pending closing conditions and regulatory approvals -- Smithfield will add the Farmer John and Saag's Specialty Meats brands to its lineup, as well as two processing facilities and three farms to its operations.

"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," said Kenneth Sullivan, president and chief executive officer of Smithfield Foods. "As we continue this transition and expand our operations, we are proud to welcome these new West Coast employees into our growing Smithfield family."

Clougherty Packing, based in southern California, is a leading integrated producer and processor of a full line of branded pork products. Founded in 1931, Farmer John is the number-one bacon and sausage brand in southern California. Saag's Specialty Meats is a premium brand of deli meat and specialty sausage made without any artificial flavors, colors, fillers, extenders or monosodium glutamate. Along with two California-based processing facilities, Smithfield will acquire three PFFJ LLC farms located in Arizona, California and Wyoming. Altogether, the operations will add 2,000 employees, growing Smithfield's total workforce to 52,000.

“We appreciate the Farmer John, Saag’s and PFFJ employees’ dedication and commitment to their customers and consumers. While the businesses have performed well, they no longer align with our company’s growth strategies,” said Jim Snee, president and CEO of Hormel Foods. “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.” 

The purchase price for Clougherty Packing is $145 million, pending capital adjustments at closing. The transaction is expected to take place within the next 30 days, pending customary closing conditions and regulatory approvals.

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