Hormel Foods Corp. has entered a definitive agreement to acquire value-added chicken company Brakebush Brothers LLC from the Brakebush family for about $1.055 billion, the company announced Sept. 30.
The transaction is expected to close during the first quarter of Hormel’s fiscal 2027, subject to customary closing conditions, including regulatory approval.
Founded in 1925 and headquartered in Westfield, Wisconsin, Brakebush is a non-vertically integrated chicken provider serving a foodservice customer base of national and regional operators. The company generated about $1.2 billion in net sales over the past 12 months and operates five production facilities and two research and development labs.
For Austin, Minnesota-based Hormel, the deal advances its strategy of investing in growing protein categories and is expected to strengthen its foodservice platform through expanded operator relationships, category expertise and a larger direct sales organization. Hormel expects the acquisition to be accretive to adjusted earnings per share beginning in fiscal 2028, with Brakebush’s results reported primarily in its foodservice segment.
“Chicken has been one of the most attractive growth categories in protein, and Brakebush has built an exceptional platform to serve that demand,” said John Ghingo, president and CEO-elect of Hormel Foods. “Hormel Foods has built a strong foodservice business by helping operators succeed through innovation, service and value-added solutions. We believe that Brakebush will bolster our capabilities, bringing additional scale, expertise and customer reach, in support of our long-term growth strategy.”
Chicken grows to 13 percent of portfolio
On a conference call discussing the deal, interim CEO Jeff Ettinger said the acquisition significantly rebalances Hormel’s protein mix. Chicken historically has been “the least of the proteins” for the company, at under 5 percent of its portfolio; with Brakebush, it will grow to about 13 percent, even alongside Hormel’s turkey and beef businesses.
Ettinger noted Brakebush is not vertically integrated and has no harvest operations, instead purchasing chicken inputs and focusing on further processing, which Hormel saw as a plus. He said the company had been on Hormel’s acquisition watch list for more than two decades.
While about 90 percent of Brakebush’s business is in foodservice channels, executives pointed to retail as a growth avenue. Brakebush has some retail business today, and Ghingo said Hormel sees “clear opportunities to expand value-added chicken within our consumer-branded portfolio in the retail space,” citing consumer momentum for chicken and Hormel’s broad set of retail customers and channels.
“We are going to look at both pieces of business and look for expansion opportunities, but in the near term, the business will report into our food service segment,” Ghingo said.
Brakebush will operate as a subsidiary of Hormel, and CFO Ash Bhumbla said the company has identified about $20 million in annual run-rate cost synergies, primarily in procurement and manufacturing productivity, which it expects to realize by the end of fiscal 2028. Bhumbla said the value-added chicken category in foodservice has grown at a mid-single-digit rate over the past five-plus years, with Brakebush outperforming that trend.
Ghingo framed the acquisition as Hormel’s fourth portfolio-shaping action in the past year, following the divestitures of its Justin’s nut butter brand, whole-bird turkey business and Brazil operations. “We have taken deliberate actions to remove businesses from the organization that were non-strategic and creating complexity,” he said. “And now we have agreed to acquire a company that doubles down on our Advantage Food Service business, expands our presence in the on-trend value-added chicken category and has a strong track record of execution.”
A people-first company
“Brakebush has always been a people-first company, built on strong relationships, shared values and a commitment to doing business the right way,” said Carey Brakebush, chairman of the board at Brakebush. “We see those same qualities in Hormel Foods. Their culture, integrity and long-term approach to growth give us great confidence that Brakebush will continue to thrive for our employees, customers and communities in the years ahead.”
A Fortune 500 global branded food company, Hormel Foods’ portfolio includes Hormel, Spam, Planters, Skippy, Jennie-O and Applegate, among other brands.
Related: Hormel Foods President Ghingo To Succeed Interim CEO