Hormel Foods is selling its large pork processing plant in Fremont, Neb., in order to move further into the consumer foods sector. The new owner, WholeStone Farms LLC, is a recently formed offshoot of the Pipestone System.
The sale price of the deal was not disclosed, as Hormel required a “quiet period” ahead of a quarterly financial report that will come next week. The Star Tribune reported the company was valued at more than $14.2 million, employs about 1,500 people and produces meat products such as Spam, bacon, pepperoni, pork sausages and lunch meat.
Hormel will likely take the revenue from the sale and spend it on innovation or new brands. The company has made several acquisitions in recent years, including Skippy peanut butter, Wholly Guacamole, Muscle Milk and Justin's Nut Butters.
Terms of the deal say WholeStone will sell the Fremont-produced pork exclusively to Hormel for further processing for at least three years with an option to extend. The current Fremont plant management team and workforce will remain in place to ensure business continuity for all stakeholders.
“We look forward to working with WholeStone Farms to ensure a smooth transition for our employees, suppliers and customers,” said Glenn Leitch, executive vice president of supply chain at Hormel Foods in a news release. “A multiyear supply agreement with WholeStone Farms ensures the Fremont facility will continue as an integral part of our supply chain in the future. Our focus continues to be on ensuring a stronger supply chain from procurement to shipment of products, fully optimizing our system to create an efficient, enterprise-wide structure to keep pace with the growing needs of our business.”
“Changing Dynamics in the Pork Industry”
WholeStone Farms chairman Luke Minion says the purchase aligns with the company’s goal to create and capture value in the pork supply chain for their 220 independent producer-owners.
Collectively, the Pipestone System raises 12 million pigs per year and farms nearly 400,000 acres of crops to supply the operations with feed. Buying the Fremont plant gives its members access to a plant to slaughter their own hogs.
“We value the dedication and experience the existing team brings to WholeStone Farms, and are committed to significant additional investments in the facility for production efficiencies and enhancing employee wellness,” stated Dr. Luke Minion, chairman of the board of directors of WholeStone Farms.
Pipestone also plans to establish a corporate headquarters in Fremont and locate executive functions there.
The transaction is subject to customary closing conditions and is expected to be completed in December 2018.