Filing Flows › Hormel Foods (HRL) › Takeover & LBO
Is Hormel Foods (HRL) a takeover target?
A leveraged buyout at today's price plus 30% ($28.57 a share) would return a loss of about 3% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $12.80 a share (−42% against today's $21.98).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $28.57 | today's $21.98 plus 30% |
| × shares | 551.1 million | |
| = Equity value | $15.7B | |
| + Debt refinanced | $2.9B | |
| − Cash | $868M | |
| + Other claims | $16.2M | preferred stock, minority interests |
| = Enterprise value | $17.7B | 21.0× EBITDA of $846M |
| Fees | $355M | 2% of the price |
| New debt | $4.7B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $13.4B | 74% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $12.2B | $852M | $356M | $107M | $4.5B |
| Year 2 | $12.4B | $863M | $348M | $111M | $4.4B |
| Year 3 | $12.6B | $879M | $339M | $116M | $4.3B |
| Year 4 | $12.9B | $900M | $330M | $124M | $4.2B |
| Year 5 | $13.3B | $927M | $321M | $134M | $4.1B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 16.7× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $15.5B | |
| − Debt left | $4.1B | |
| = Buyer's equity | $11.4B | |
| Money multiple | 0.85× | on $13.4B put in |
| Buyer's yearly return (IRR) | −3.2% |
Price against return
What the buyer makes at other premiums over today's $21.98; the IRR reaches 20% at $12.80 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $24.17 | 0.8% |
| 20% | $26.37 | −1.3% |
| 30% | $28.57 | −3.2% |
| 40% | $30.77 | −4.9% |
| 50% | $32.96 | −6.4% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $12.1B | |
| EBITDA, last 12 months | $846M | 7.0% of revenue |
| Depreciation and amortization | $272M | |
| Capital spending | $311M | |
| Debt | $2.9B | |
| Cash | $868M | |
| Share price | $21.98 | on Nov 6, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 0.7% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 30% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Hormel Foods would cost about $29.12 a share, $16.0B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 20% | $26.37 | $14.5B |
| Median | 32.5% | $29.12 | $16.0B |
| High end (a quarter paid more) | 51.8% | $33.36 | $18.4B |
Hormel Foods' latest quarter
Hormel Foods, Q3 FY26: revenue $3.0B (-2% year over year), operating margin 3.7%, net earnings $59.5M, operating cash flow $241M. The chart follows the revenue to costs, profit and cash.
Questions
Is Hormel Foods being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Hormel Foods?
A leveraged buyout at today's price plus 30% ($28.57 a share) would return a loss of about 3% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $12.80 a share (−42% against today's $21.98).
What would a takeover of Hormel Foods cost?
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Hormel Foods would cost about $29.12 a share, $16.0B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.