Hormel Foods Signs Deal to Buy Brakebush Brothers for $1.055 Billion

Hormel Foods Corporation (NYSE: HRL) has announced a definitive agreement to acquire Brakebush Brothers, LLC, a value-added chicken company, for a transaction purchase price of $1.055 billion, subject to customary closing adjustments and regulatory approval. The deal is expected to close in the first quarter of fiscal 2027.

The acquisition is designed to expand Hormel's position in the protein sector by integrating a scaled business with a well-invested manufacturing network. Brakebush operates five production facilities and two research and development labs, producing fully cooked, par-fried, and raw portioned products. The company has been family-owned for over 100 years and is described as a leading, non-vertically integrated chicken provider with a diversified foodservice channel mix.

Brakebush's revenue profile is heavily weighted toward the foodservice sector, which accounts for approximately 90% of its sales, with retail representing the remaining 10%. The transaction will primarily be reported through Hormel's Foodservice segment, strengthening the platform through Brakebush's direct sales organization and category expertise. Hormel expects the acquisition to enhance cash flow and operating margins over time while advancing its broader growth strategy.

Financially, the transaction carries an implied adjusted EBITDA multiple of 10.7x based on Brakebush's estimated adjusted EBITDA for calendar year 2026. Hormel anticipates run-rate cost synergies of roughly $20 million by the end of fiscal 2028 and expects a tax basis step-up on the acquired assets.

Hormel plans to finance the purchase using a combination of cash on hand and long-term debt. The company states it is committed to maintaining a strong investment-grade rating and has outlined a reasonable path to deleveraging over time following the acquisition. The deal remains subject to standard closing conditions, including receipt of regulatory approvals without unexpected delays or conditions.

Hormel noted that certain Brakebush financial figures presented are based on management estimates, and actual figures may differ materially from those presented or from subsequently prepared financial statements. The company also cautioned that risks related to completing the acquisition, realizing anticipated benefits, and integrating operations could adversely impact the expected value of the deal.