Austin-based Hormel Foods Corp. is bulking up its portfolio of companies by buying the maker of Muscle Milk protein drinks for $450 million.
Hormel, which produces Spam, Jennie-O Turkey and Skippy Peanut Butter among many other products, announced Monday evening that it had signed a deal to buy Benicia, Calif.-based CytoSport Holdings, Inc.
“Muscle Milk products will serve as a growth catalyst for our Specialty Foods segment, providing this division with a leading brand in the high-growth sports nutrition category,” stated Hormel CEO and President Jeffrey M. Ettinger in the press announcement. “The acquisition of CytoSport expands our offerings of portable, immediate, protein-rich foods, and broadens our appeal with younger consumers.”
Muscle Milk power and drinks are used by many bodybuilders as muscle-building boost. It's considered the top brand in the ready-to-drink protein drink category. CytoSport launched Muscle Milk in 2000 and its grown to be its most popular brand. The company also makes other products like protein bars, oatmeal and ready-to-drink products.
Hormel anticipates CytoSport's total 2014 sales to hit an estimated $370 million. The deal is expected to officially close within 30 days.
CytoSport, which is owned by the Pickett family, first started talking to potential buyers in the fall of 2013. Hormel was considered a possible buyer from the start, along with Irish cheese maker Glanbia and Colorado-based butter and soy milk maker Whitewave Foods. The early pricing talk in 2013 was that CytoSport was looking for $500 million for the company.
Hormel already has a protein drink product line made by Hormel Health Labs, but HealthyShot drinks are aimed at medical patients and seniors who have trouble eating or swallowing.
This is acquisition follows another Hormel non-meat protein buy in 2013, when it bought Unilever's Skippy peanut-butter business for $700 million.