Sara Lee Corp. (SLE) completed the acquisition of Aidells Sausage, the San Francisco-based premium meats business, for $87 million. The deal was initially announced on May 5, 2011.
For over the past 25 years, the company has handcrafted all its natural sausages. Aidells is very well known for its products made with smoked natural chicken & turkey, fruits & vegetables and herbs & spices. Aidells' strong brand name in the sausages and convenience food items prompted Sara Lee to go ahead with the acquisition.
The acquisition is a part of Sara Lee’s strategic decision to increase its presence in the organic and natural meats segment. Consequently, Sara Lee also intends increasing its coverage of fast-growing retail channels, as most Aidells stores are located in strategic locations across North America.
Further, the meats business is highly competitive, with an emphasis on product quality, innovation and value. Therefore, new product innovations which are healthy as well are a key component to success.
The acquisition will strengthen the company’s North American Retail segment (26.0% of total sales in fiscal 2010). The segment primarily focuses on hot dogs and corn dogs, breakfast sausages, breakfast convenience items, including breakfast sandwiches and bowls, smoked and dinner sausages, premium deli and luncheon meats, bacon, cooked hams and frozen pies, cakes, cheesecakes and other desserts.
Based in Downers Grove, IL, Sara Lee is a global manufacturer and marketer of high-quality, brand-name products focused primarily on the meats, bakery and beverage categories, worldwide.
In an attempt to become a more leaner company and focus primarily on Food products both domestically and internationally, the company during fiscal 2010 divested its International Household and Body Care business to its primary competitors in that segment, namely Procter & Gamble (PG), Unilever (UL) and Godrej.
Sara Lee currently holds a Zacks #3 Rank, which implies a short-term ‘Hold’ rating.
PROCTER & GAMBL (PG): Free Stock Analysis Report
SARA LEE (SLE): Free Stock Analysis Report
Be the first to comment