Hormel Foods to acquire CytoSport Holdings for $450 mn
01 Jul 2014
Hormel Foods Corp said it planned to acquire CytoSport Holdings Inc for about $450 million, Reuters reported.
The acquisition would see the company add Muscle Milk sports nutrition products to its portfolio of brands.
According to Hormel Foods, it expected the deal to be neutral to earnings in 2014 and add about 5 cents to earnings in 2015.
BofA Merril Lynch served as its financial adviser for the deal.
Muscle Milk products come with lactose-free protein supplements used by athletes and others seeking to build muscle mass.
CytoSport is expected to gross $370 million in sales in 2014, Minnesota-based Hormel said in a statement yesterday.
Bloomberg reported Muscle Milk further strengthened Hormel's product line which boasts Hormel chili, Dinty Moore Beef Stew, Skippy peanut butter and ready-to-heat Don Miguel Mexican Foods.
The company's line of meat and cheese wraps called Rev for young consumers introduced in 2013, would be especially complemented by Muscle Milk, chief executive officer.
He added, the acquisition not only built upon the company's strength in protein but also allowed the company to diversify its product portfolio. He added, with Muscle Milk the company had got the leading share player in a significant growth category.
According to Ettinger, CytoSport got Hormel ''further into the realm of portable protein-rich items.'' He added, the entire product line for Muscle Milk in the ready-to-drink form satisfied the kind of immediacy that consumers were looking for.
He added, Hormel would also gain better access to specialty stores like General Nutrition Centers Inc and convenience retailers.
Ettinger said Hormel remained willing to take on as much as $2 billion in debt for more acquisitions. The shares of Hormel were up 9.3 per cent this year to $49.35 at yesterday's close in New York.
