Conagra Brands sells Chef Boyardee to Hometown Food Co. for US$600M

USA – Hometown Food Co. has announced plans to purchase the Chef Boyardee brand from Conagra Brands Inc. in a cash transaction valued at US$600 million (US$600M).

The acquisition, revealed on May 1, includes the entire Chef Boyardee business and its 820,000-square-foot manufacturing plant in Milton, Pennsylvania, which employs about 500 people.

As part of the deal, Hometown will also assume control of all assets and operations linked to the brand, though Conagra will retain licensing rights for the brand’s frozen skillet meal line.

The transaction is expected to be finalized in the second quarter of 2025, pending regulatory approval and standard closing procedures.

Hometown, which is backed by private equity firm Brynwood Partners and headquartered in Chicago, says it will manage the Chef Boyardee business from its existing offices.

Chef Boyardee, a more than century-old brand originally founded by Italian immigrant Hector Boiardi, has long been a staple in American households with products like Beef Ravioli, Spaghetti & Meatballs, and Beefaroni.

These ready-to-eat pasta items are distributed across grocery, mass, and discount retailers in the United States, as well as in Canada and Puerto Rico.

Conagra reported that Chef Boyardee products brought in approximately US$450 million (US$450M) in net sales during its 2024 fiscal year.

According to Conagra CEO Sean Connolly, the divestiture is part of the company’s ongoing strategy to streamline its portfolio and concentrate more on its frozen foods and healthy snacks segments.

Connolly added that the sale would also help the company reduce its debt amid an increasingly challenging economic environment.

This announcement follows a recent report showing that Conagra’s sales and earnings declined in the third quarter of its fiscal year 2025, which ended on February 23.

The company’s net revenue fell by 6.3% to US$2.8 billion (US$2.8B), driven mainly by a 5.2% drop in organic sales and smaller impacts from currency shifts and acquisitions.

A breakdown of the figures shows a 2.1% fall in pricing and mix and a 3.1% dip in volume, largely due to retail strategy changes and previous trade expense corrections.

Conagra’s gross profit slipped 17.3% to US$710 million (US$710M), while adjusted gross profit declined 19.1% to US$704 million (US$704M), citing higher production costs and lower volumes.

Consequently, the company’s gross margin shrank by over three percentage points, and operating margins saw sharp reductions as well.

Net income attributable to shareholders dropped by more than half to US$145 million (US$145M), while adjusted net income fell 26.3% to US$242 million (US$242M).

Conagra attributed much of the decline to supply chain problems in its frozen meals and vegetable lines, which impacted shipment volumes.

Expanding Hometown’s portfolio

With the Chef Boyardee addition, Hometown Food says its annual gross revenue will rise above US$1.6 billion (US$1.6B), and its workforce will expand to around 1,500 employees.

The acquisition will also increase the company’s production network to four plants located across the Northeastern, Midwestern, South Central, and Southeastern regions of the U.S.

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