Hormel Foods expands range by acquiring CytoSport for $450m

US-based consumer branded food and meat products firm Hormel Foods has completed its acquisition of milk products maker CytoSport Holdings.

Hormel Foods acquired CytoSport from TSG Consumer Partners and the Pickett family, who founded the brand in 1998. CytoSport, which is based in Benicia, California, produces the top brand in the ready-to-consume protein beverage category, Muscle Milk.

Hormel’s focus on protein aligns with CytoSport’s agenda of creating premium protein foods for sports nutrition, while also expanding the acquirer’s horizons.

The acquisition cost Hormel Foods nearly $450m, with the company expecting the purchase to bring around $0.05 per share accumulation in fiscal 2015, counting transaction costs. The annual sales for this year are estimated to be $370m, having a neutral impact on fiscal 2014 revenue.

Hormel Foods chairman, president and CEO Jeffrey Ettinger said: "Muscle Milk products will serve as a growth catalyst for our speciality foods segment, providing this division with a leading brand in the high-growth sports nutrition category.

"The acquisition of CytoSport expands our offerings of portable, immediate, protein-rich foods, and broadens our appeal with younger consumers. Muscle Milk premium protein products further enhance our balanced business model."

BofA Merrill Lynch is acting as the exclusive financial advisor to Hormel Foods for this transaction.