Smithfield to Buy Hormel’s Farmer John, Saag’s Brands

November 22, 2016

2 Min Read
Smithfield to Buy Hormel’s Farmer John, Saag’s Brands
Farmer John and Saag's Specialty Meats, produced by Clougherty Packing LLC, were purchased by Smithfield Foods. Image courtesy of Farmer John

Smithfield Foods Inc. is in the process of purchasing Clougherty Packing LLC, a subsidiary of Hormel Foods Corporation that produces and processes pork products, for $145 million in cash, the companies announced Monday in separate press releases. Included in the transaction are the Farmer John and Saag’s Specialty Meats brands, two processing facilities, and three farms.

“While the businesses have performed well, they no longer align with our company’s growth strategies,” said Jim Snee, president and chief executive officer of Hormel Foods in its release. “This divesture 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.”

Farmer John uses 7400 hogs in daily production, according to Hormel, and brought in $500 million in sales in the fiscal year of 2016. Clougherty Packing LLC is an integrated producer and processor of branded pork products based in Vernon, CA. Farmer John is the top bacon and sausage brand in southern California, according to Smithfield. Saag’s Specialty Meats makes premium deli meat and specialty sausage.

“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 Smithfield’s president and chief executive officer Kenneth M. Sullivan in a statement. “As we continue this transition and expand our operations, we are proud to welcome these new West Coast employees into our growing Smithfield family.”

2000 employees from the Hormel-owned operations will move to Smithfield following the completion of the transaction, Smithfield’s press release said. The companies expect the transaction to be completed within 30 days upon regulatory approval.

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