Arbor Sells Salami Maker to Hormel

Hormel Foods has agreed to acquire Columbus Manufacturing, a branded manufacturer of salumi and related deli meat products, from Arbor Investments for $850 million. Arbor acquired Columbus in October 2012 from Endeavour Capital.

Columbus Manufacturing is a branded manufacturer of retail ready, super premium, artisanal salumi and related deli meat products. Salumi are Italian cured meat products and are predominantly made from pork (Editor’s note: “salami” is the plural of “salame” which is a type of “salumi”). Products are exclusively sold through supermarkets, club stores and specialty grocery stores across North America. The company, led by CEO Joe Ennen, was established by the Domenici and Parducci families in 1917 and is headquartered near San Francisco in Hayward, CA (www.columbuscraftmeats.com).

“We are pleased to add Columbus to the Hormel Foods family. Columbus has an outstanding reputation in the food industry and is well-positioned in the advantaged retail deli category,” said Jim Snee, President and Chief Executive Officer at Hormel Foods. “Columbus is capitalizing on one of the fastest-growing areas in the retail grocery store with premium, authentic products that are on-trend with today’s consumers who are looking for unique experiences, flavors, and products.”

Upon closing of the transaction, Columbus will continue to operate from its facilities in California and will report into the Refrigerated Foods segment of Hormel. “The acquisition of Columbus will serve as a catalyst for uniting all our deli businesses into one customer-facing organization,” added Mr. Snee. “This acquisition significantly enhances our scale in the deli by broadening our portfolio of products, customers, and consumers. The synergies we can unlock with this acquisition are clear and I’m excited for the next evolution of our company.”

Hormel Foods (NYSE: HRL) is a global branded food company with over $9 billion in annual revenues. The company’s brands include SKIPPY, SPAM, Hormel Natural Choice, Applegate, Justin’s, Wholly Guacamole, Hormel Black Label and more than 30 other brands. Hormel Foods is headquartered in Austin, MN (www.hormelfoods.com).

Columbus Manufacturing was advised by BofA Merrill Lynch and DLA Piper. In addition, Rothschild provided financial advice to Columbus Manufacturing. Hormel Foods was advised by Barclays and Faegre Baker Daniels.

Arbor, the seller of Columbus Manufacturing, invests in the food, beverage and related industries. Typical targets will have annual revenues of up to $300 million and EBITDA from $5 million to $50 million. Since founding in 1999 the firm has acquired or invested in over 52 companies that were active in the frozen foods, baked goods, dairy, protein, foodservice equipment, bottling, ingredients, packaging, and distribution segments. In July 2016 Arbor closed its fourth equity fund, Arbor Investments IV LP, with$765 million of capital and its first subordinated debt fund, Arbor Debt Opportunities Fund I LP, with $125 million of capital. Arbor is based in Chicago (www.arborpic.com).

© 2017 Private Equity Professional | November 2, 2017

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