Hormel Foods (HRL) investor relations material

Deal rationale and strategic fit

• Acquisition of a leading value-added chicken company expands presence in the high-growth protein segment and strengthens the foodservice platform through direct sales, category expertise, and innovation.

• Aligns with long-term growth strategy, deepening presence in value-added chicken and broadening foodservice reach.

• Adds a scaled, reputable asset with differentiated innovation capabilities and a well-invested manufacturing network.

• Both companies share a customer-focused, solutions-driven culture, supporting smooth integration and future growth.

• Reflects disciplined portfolio management by redeploying capital from non-strategic businesses to strategic growth areas.

Financial terms and conditions

• Purchase price is approximately $1.055 billion in cash, on a cash-free, debt-free basis, subject to customary adjustments.

• Purchase price represents a 10.7x EBITDA multiple before synergies and 8.9x including expected cost synergies.

• Brakebush net sales estimated at approximately $1.2 billion for CY2026.

• Expected to be financed through a mix of cash on hand and new debt, maintaining investment-grade credit profile.

• Asset purchase treatment for tax purposes provides ongoing cash tax benefits.

Synergies and expected cost savings

• Identified $20 million in annual run rate cost synergies, mainly in procurement and manufacturing productivity, targeted by end of fiscal 2028.

• Additional commercial revenue opportunities expected from combining customer relationships and capabilities.

• Expected to enhance cash flow and operating margins over time.