Meat + Poultry - March 2016 - 11

BUSINESS NOTES

SYSCO APPLIES BRAKES

BACHOCO FINALIZES DEAL FOR US PLANT

Sysco Corp. has reached an agreement to acquire Brakes
Group from Bain Capital Private Equity for approximately
$3.1 billion. Brakes Group is a European foodservice
distributor with operations in the United Kingdom,
Ireland, France, Sweden, Spain, Belgium and Luxembourg.
Under terms of the transaction, Sysco said it would repay
approximately $2.3 billion of Brakes Group's financial debt.
Headquartered in London, Brakes Group will operate
as a standalone company within Sysco. The business will
continue to be led by CEO Ken McMeikan, with the rest of
the company's management team remaining in place.
"We look forward to welcoming Brakes Group, its
15,000 employees, and Ken McMeikan and his highly
respected leadership team to the Sysco family of
companies," said Bill DeLaney, CEO of Sysco. "This
transaction will unite Sysco with a leading foodservice
distributor in Europe with demonstrated capability to
sustainably grow its business over time. Beginning with
a common customer-centric mindset, our companies are
strategically aligned with compatible cultures and similar
business models. We expect to retain key members of
Brakes Group's talented leadership team and to experience
little distraction from integration given the minimal overlap
of the businesses. Sysco's management team remains
confident in and committed to achieving our previously
announced three-year plan financial objectives."

Industrias Bachoco, a leading Mexican producer and
processor of poultry and other food products, announced
the formal acquisition of a fully cooked chicken product
plant from American Foods Group in Oklahoma City,
Oklahoma, on Feb. 22. Plans for the transaction were
announced Dec. 21, 2015.
Officials with OK Foods, a Bachoco subsidiary with
facilities in Arkansas and Oklahoma, oversaw a majority of
the details of the deal.
A release by the company said the transaction was
about $8 million, which includes all of the assets at the
Oklahoma City facility. The Oklahoma plant produces
more than 700,000 lbs. of fully cooked chicken products
per week.

"Our mission is simple: to help businesses who serve
food to thrive, and becoming part of the Sysco family will
help us get closer toward achieving that great outcome
for our customers, colleagues and suppliers," McMeikan
said. "Similar to Sysco's approach, Brakes Group serves
thousands of customers across Europe every day,
including pubs, restaurants, hotels, hospitals, schools,
contract caterers and more. We have continued to flourish
in recent years, and the significant investment that has
been made in Brakes Group provides us with a very solid
platform for further growth as part of Sysco."

APPLEGATE ACQUISITION RAISES
OPTIMISM AT HORMEL
Hormel Foods' acquisition of Applegate Farms this past
year has expanded the company's presence in the natural
and specialty foods channels. With the release of its
first-quarter results on Feb. 16, management said the new
business unit is meeting expectations and the company is
optimistic about future growth opportunities.
What stands out as unique about the acquisition is
that Hormel Foods is not integrating the business in a
traditional fashion, said Jim Snee, president and chief
operating officer, in an interview with Food Business
News, a MEAT+POULTRY sister publication, during the
Consumer Analyst Group of New York conference that
took place in Boca Raton Feb. 16-19.
Rather, Snee said, the two companies are collaborating.
"For example, we sent a team of Hormel people to
Bridgewater (New Jersey) to get a sense of how they
operate," Snee said. "Then we reciprocated and brought an
Applegate team to Austin (Minnesota).
"There are some functional areas where we have more
resources in Austin than they do. R&D is one of them. We
have a pilot plant that they don't. Another area is supply
chain. They have good supply chain people, but they don't
have our expertise."
He added that the acquisition has opened new doors
for the company.
For the first quarter of fiscal 2016, ended Jan. 24,
Hormel Foods recorded net earnings of $235,167,000,
equal to 44 cents per share on the common stock, and an
increase compared with the previous year when firstquarter earnings totaled $172,430,000, equal to 33 cents
per share.
Sales for the quarter were down from $2,395,073,000
in fiscal 2015 to $2,292,672,000, during the first quarter of
fiscal 2016.
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