010143 Hormel to Buy Turkey StoreJanuary 24, 2001Austin, MN - Hormel Foods Corp., the maker of Spam lunch meat and Dinty Moore stew, said it would buy The Turkey Store Co. for $334.4 million in cash, strengthening Hormel's position as the world's largest turkey processor. Hormel said it would merge The Turkey Store with its own Jennie-O Foods unit, whose processed turkey products have a strong presence in U.S. grocery stores. The Turkey Store, the No. 6 U.S. turkey processor, had sales of about $309 million for the fiscal year ended in February, Hormel said. Buying the Barron, Wisconsin-based company will help Hormel continue expansion into branded grocery products while improving logistics and distribution. The Turkey Store, which sells products primarily under its own name in supermarkets and foodservice operations, will boost Hormel's turkey production by nearly 40% to 1.2 billion pounds annually. “This combination offers significant synergies, and we expect it to be immediately accretive,” said Joel Johnson, Hormel's chairman and chief executive, in a prepared statement. He added that Hormel expects sales growth to accelerate pending the deal's expected closure in March. Hormel posted sales of $3.68 billion for its fiscal year ended in October. In addition, the purchase is expected to lower costs, as The Turkey Store's operations are focused on the Midwest, where turkeys can be raised on the best and least costly grains available, Hormel said. The transaction has already cleared U.S. antitrust hurdles, Hormel said. Upon completion of the deal, Turkey Store Chief Executive Jerry Jerome will become CEO of the combined Jennie-O Foods Turkey Store unit of Hormel. Jeffrey Ettinger, president of Jennie-O, will become president and chief operating officer. Already the deal is seen as helping Hormel expand distribution for Turkey Spam, a new product being offered under the well-established Spam brand, CEO Johnson said.
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