Hormel Foods Corp., Austin, Minn., announced the closing of its acquisition of CytoSport Holdings Inc., Benicia, Calif. The purchase price was approximately $450 million. The deal includes the Muscle Milk brand of shelf-stable, ready-to-drink protein beverages; a manufacturing facility in Benicia, Calif.; as well as several manufacturing and distribution agreements both domestically and abroad, according to Hormel Foods.
As a leading provider of premium protein products in the sports nutrition category, CytoSport’s brands align with Hormel Foods’ focus on protein, while further diversifying its portfolio, the company says. The acquisition will serve as a growth catalyst for the company’s specialty foods segment and also expands its offerings of portable, immediate, protein-rich foods, it adds. Total 2014 annual sales for the CytoSport brand are expected to be approximately $370 million, it notes.
Prior to the acquisition, CytoSport was owned by the Pickett family, which founded the company in 1998, and San Francisco-based TSG Consumer Partners, which was the company’s strategic equity partner. Hormel Foods expects this acquisition to provide about 5 cents per share accretion in fiscal-year 2015, with a neutral impact to fiscal-year 2014 earnings, including transaction costs.