Business
Cal-Maine Foods Closes Acquisition of Echo Lake Foods
RIDGELAND, Miss.--(BUSINESS WIRE)-- Cal-Maine Foods, Inc. (NASDAQ: CALM) (“Cal-Maine Foods” or the “Company”), today announced the closing of its acquisition
About this update from Cal-maine Foods, Inc.
[{"type":"text","content":" RIDGELAND, Miss.--(BUSINESS WIRE)--\nCal-Maine Foods, Inc. (NASDAQ: CALM) (“Cal-Maine Foods” or the “Company”), today announced the closing of its acquisition of Echo Lake Foods.\n\n\nThe Company announced in April that it signed a definitive agreement to acquire Echo Lake Foods in an all-cash transaction for approximately $258 million, which is expected to provide a tax benefit of ~$28 million equating to an effective purchase price of ~$230 million. Echo Lake Foods produces, packages, markets and distributes ready-to-eat egg products and breakfast foods, including waffles, pancakes, scrambled eggs, frozen cooked omelets, egg patties, toast and diced eggs. Echo Lake Foods had annual revenues of approximately $240 million in 2024 with a five-year CAGR of approximately 10%.\n\n\nHighlights of the Transaction:\n\n\nCompelling Strategic Rationale\n\n\n\nAllows Cal-Maine Foods to enter the large, growing and highly stable value-added food portion of the egg category\n\n\n\nExpands strategic customer relationships with retail, quick service restaurant and other food service customers\n\n\n\nLeverages Cal-Maine Foods’ extensive sales and supply chain distribution capabilities\n\n\n\nAttractive Financial Returns\n\n\n\nProvides access to additional long-term growth opportunities while reducing earnings volatility\n\n\n\nEstimated potential $15 million annual synergy opportunity driven by egg purchasing efficiencies and SG&A savings\n\n\n\nExpected mid-single digit percentage accretion to EPS (including synergies) in FY2026.\n\n\n\nSherman Miller, president and chief executive officer of Cal-Maine Foods, stated, “The addition of Echo Lake Foods advances our stated strategy to expand and diversify our product portfolio and customer mix. Echo Lake Foods is a leading innovator with a long history of providing quality ready-to-eat egg products and breakfast foods to a blue-chip customer base. The combined product lines and capabilities of the two companies are highly complementary and, importantly, we share similar values of pursuing operating excellence and meeting the needs of our customers.\n\n\n“The acquisition of Echo Lake Foods meets our disciplined set of investment criteria, including relevant geographic markets, operating synergies, product mix, proximity to customers and expected financial returns. The Echo Lake Foods team has bu...