Meat-oriented food solutions provider for the retail and
The Hillshire Brands Co.
) recently inked a definitive agreement to acquire Calif.-based
Golden Island - one of the sought-after manufacturers of premium
gourmet jerky products. Financial terms of the deal were not
disclosed. The transaction is expected to be close by the end of
Founded more than 50 years ago, Golden Island has significant
experience in meat products and produces over 20 gourmet
varieties. Further, products from the Golden Island Jerky brand
use natural items and contain 40-60% less sodium than most other
jerkies. Its innovative mode of preparation sets the brand apart
from traditional jerkies and makes it a lucrative acquisition
We view the deal as strategically positive for both parties as
they operate in the same vertical. Post acquisition, Golden
Island will join Hillshire Brands' Gourmet Food Group, teaming up
with other premium brands like Aidells and Gallo.
Post-acquisition, Golden Island will benefit from Hillshire's
much larger scale of operation.
On the other hand, the Golden Island acquisition will open up
opportunities for Hillshire Brands in the dried meat snacks
category. This promising category generates retail sales of more
than $2 billion annually and registered 10% volume growth over
the past two years. However, Hillshire Brands does not expect
this acquisition to have a considerable impact on earnings this
Hillshire Brands is not the only food company looking to expand
inorganically. In the recent past, sell-offs and acquisitions
have gained momentum in the foodservice industry. Of these,
B&G Foods Inc.
) acquisition of Pirate Brands in July and T
he J. M. Smucker Co.
) acquisition of organic and gluten-free ancient grain products
maker Enray Inc. in August are worth mentioning. Another company
in the same sector,
Flowers Foods Inc.
) continued its series of acquisitions with the takeover of 20
Hostess Bakeries and 5 Bread Brands in July this year.
B&G FOODS CL-A (BGS): Free Stock Analysis
FLOWERS FOODS (FLO): Free Stock Analysis
HILLSHIRE BRAND (HSH): Free Stock Analysis
SMUCKER JM (SJM): Free Stock Analysis Report
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