Good morning. Welcome to the Hormel Foods conference call regarding today's announcement of our agreement to acquire Brakebush Brothers, LLC. Earlier this morning, we issued a press release announcing the transaction. If you did not receive a copy of the release, you can find it on our website, hormelfoods.com, under the Investors section, along with supplemental slide materials. Joining me on today's call are Jeff Ettinger, interim Chief Executive Officer, John Ghingo, President and Chief Executive Officer elect, and Ash Bhumbla, Chief Financial Officer. Jeff, John, and Ash will discuss the strategic rationale for the acquisition, provide an overview of the transaction, and review our financial expectations. We will conclude with the Q&A portion of the call, and the line will be open for questions following the prepared remarks. Before we get started today, I'd like to reference our safe harbor statement.
Some of the comments we make today will be forward-looking, and actual results may differ materially from those expressed in or implied by the statements we will be making. Please refer to today's press release and our SEC filings, which can be accessed on our website under the Investors section. Additionally, please note we may discuss certain non-GAAP financial measures this morning. Management believes that doing so provides investors with a better understanding of the company's underlying operating performance. Reconciliations of these measures, where applicable, can be found in the materials posted on our website. With that, I'll turn the call over to Jeff.
Thank you, Jess, and good morning, everyone. Today, we are announcing an important step in the continued evolution of Hormel Foods. We have agreed to acquire Brakebush, a leading value-added chicken company with a major presence in the foodservice industry. For more than 100 years, Brakebush has earned the trust of customers through innovation, quality, and strong relationships. What attracted us to Brakebush is straightforward. First, it is a highly respected company with leading positions in value-added chicken across a variety of foodservice channels. This is a billion dollar net sales business that has delivered consistent growth over time through a diverse customer base. Second, Brakebush has a talented organization. The company's team and direct sales force have been instrumental in building and maintaining the partnerships that have supported its success. Finally, Brakebush is truly a value-added company. It is not vertically integrated.
Instead, they have built deep relationships with suppliers. Brakebush brings differentiated capabilities through five production facilities and two research and development labs. Few businesses combine this level of scale, growth, operational expertise, innovation capability, and customer loyalty. Beyond the strengths of the business itself, we believe there is meaningful cultural alignment between our organizations. Brakebush has been a family-owned business guided by a long-term perspective and a steadfast commitment to employees and communities. Those qualities resonate deeply at our 135-year-old company. As we look ahead, our focus is on building upon the strong foundation the Brakebush family and team have created. With that, I will now turn the call over to John to discuss the compelling opportunities for the future.
Thank you, Jeff. I am excited about the future ahead. Brakebush is exactly the type of business we have been looking to add to our portfolio. As we've discussed throughout the past year, we have taken a number of deliberate actions to sharpen our focus and direct resources toward the businesses, categories, and capabilities that we believe have the greatest long-term growth potential. This acquisition is another clear example of that strategy in action. We believe the combination of Brakebush's value-added chicken portfolio and our advantaged Hormel Foodservice business creates a compelling value creation opportunity for the future of our company. Protein remains one of the most attractive long-term opportunities in food, and chicken continues to grow in relevance with consumers and foodservice operators alike. Within that landscape, value-added chicken stands out as a sizable and growing category.
We believe value-added chicken will benefit from favorable demand trends, menu innovation, and operators' increasing need for convenient, high-quality solutions that make chicken preparation easy in the kitchen. Taken together, these dynamics create an attractive opportunity for sustained growth. Brakebush has built a leading position in this space through deep customer relationships, category expertise, and a commitment to innovation. The company has earned the trust of operator partners by delivering solutions that help them run their businesses more effectively and better serve their guests. Our businesses are highly complementary. Brakebush has built an outstanding position with national and regional restaurant operators, while Hormel Foods brings broad capabilities and an expansive channel presence. Together, we believe there are opportunities to broaden customer access, accelerate innovation, and bring a wider range of value-added solutions to market.
While the overwhelming majority of the business today resides in the food away from home channels, we also see clear opportunities to expand value-added chicken within our consumer-branded portfolio in the retail space. Another area of alignment is our shared commitment to staying close to customers. A towering strength of the Brakebush company is its direct sales organization and its operator-focused approach. That solutions-based philosophy closely mirrors how we have built our Hormel Foodservice business over many years. Both organizations have earned the trust of operators by helping solve challenges in the kitchen, supporting menu innovation, and delivering high-quality, value-added protein solutions. We believe this common approach creates a compelling foundation for future growth. I'd like to take a moment to add some perspective about our overall focus as an organization. We have announced four portfolio-shaping actions within the last year.
Justin's, whole-bird turkey business, our Brazil business, and now Brakebush. We have taken deliberate actions to remove businesses from the organization that were non-strategic and creating complexity. Now we have agreed to acquire a company that doubles down on our advantage foodservice business, expands our presence in the on-trend value-added chicken category, and has a strong track record of execution. One of the things we admire most about Brakebush is what the organization has already accomplished. They have built an outstanding company, a distinctive culture, and a successful business model. While there are certain areas we will look to integrate, our priority will be to remain focused on driving performance behind both Hormel Foodservice and Brakebush. With that, Brakebush will operate as a subsidiary, reporting through our foodservice segment.
When I step back and look at Hormel Foods following the completion of this transaction, I see a company that is more aligned with attractive long-term growth trends, even better positioned in Foodservice, and participating with more scale in one of the most compelling categories in protein. We believe those advantages will drive sustainable growth and long-term value creation, and we are optimistic about the opportunities ahead. With that, I would like to welcome our new Chief Financial Officer, Ash Bhumbla. I will turn the call over to him to discuss the transaction and early financial details.
Thank you, John, and good morning, everyone. I am pleased to provide additional details on our early financial expectations for the transaction. My comments this morning will pertain only to the Brakebush acquisition. We will not be covering the fourth quarter or fiscal 2027 today. Rather, we will discuss those topics on our next earnings call. With that, as we announced this morning, we have entered into a definitive agreement to acquire Brakebush for approximately $1.055 billion in cash on a cash-free, debt-free basis, and subject to customary closing adjustments. We believe this transaction represents an attractive opportunity to deploy capital in support of our long-term growth strategy.
As John has highlighted, this is a strategic combination of two highly complementary businesses. Brakebush brings proven capabilities in value-added chicken, an attractive growth profile, and strong customer relationships. Hormel Foodservice brings breadth of product offering, operating expertise, and a broader operator portfolio.
Together, we see a compelling opportunity to accelerate profitable growth, expand margins, and generate attractive long-term returns. For calendar year 2026, Brakebush is expected to generate approximately $1.2 billion of net sales. Based on estimated adjusted EBITDA for the same period, the purchase price represents an approximately 10.7x multiple before synergies and an 8.9x multiple including expected annual run rate cost synergies. We have identified approximately $20 million of annual run rate cost synergies, which we expect to realize by the end of fiscal 2028. These opportunities are primarily concentrated in procurement and manufacturing productivity. We also see meaningful revenue opportunities from combining Hormel Foods' customer relationships, Foodservice reach, and retail capabilities with Brakebush's value-added chicken portfolio, complementary direct selling organization, and operating capabilities. These commercial opportunities would be incremental to the cost synergy target.
The transaction is expected to receive asset purchase treatment for U.S. federal income tax purposes. As a result, Hormel Foods expects to receive an ongoing cash tax benefit from the step-up in the tax basis of acquired assets. We expect to finance the acquisition through a combination of cash on hand and new debt. The final instrument mix, maturity profile, and cost of debt will depend on market conditions at the time of issuance. We intend to maintain our strong investment-grade credit profile and preserve appropriate liquidity and financial flexibility. At closing, we expect pro forma net debt to adjusted EBITDA to be slightly above our long-term target range of 1.5x-2x.
Supported by the cash generation of the combined company, we expect to rapidly return net leverage to our publicly stated range within fiscal 2027, with the objective of progressing towards the lower end of that range thereafter. Importantly, this transaction does not change our other capital allocation priorities. We recently announced our 393rd consecutive quarterly dividend, and we remain committed to investing in the highest return growth and productivity opportunities across the business. We expect the transaction to close in the first quarter of fiscal 2027, subject to regulatory approvals and customary closing conditions. When we report fourth quarter results in early December, we plan to provide fiscal 2027 guidance for the combined company, including the anticipated contribution from Brakebush. At this time, we expect the acquisition to be solidly accretive to adjusted earnings per share beginning in fiscal 2028, after taking into account financing and purchase price accounting.
In summary, this transaction adds a profitable and growing business, strengthens our presence in value-added chicken and foodservice, and creates identifiable opportunities for further growth and margin expansion. We're confident that this transaction offers attractive long-term financial returns and is consistent with our commitment to disciplined capital allocation. With that, we would be happy to open the lines for questions.
At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. If you would like to withdraw your question, press star one again. We'll pause for just a moment as we compile the Q&A roster. Your first question comes from the line of Rupesh Parikh with Oppenheimer. Your line is now open. Please go ahead.
Good morning, and thanks for taking my question. Also congrats on the acquisition. To start, I would love to hear more, maybe just more about the strategic rationale of the acquisition. It seems to me, at least, you get the nice benefit of added diversification more to the more attractive foodservice business and obviously also on the chicken category. Just overall, just more color on the strategic rationale. Thank you.
Yeah, thanks for the question, Rupesh. This is Jeff Ettinger. You hit the one-two punch. It is foodservice, where we think we already have an advantage business, and this is a great opportunity to double down in that area, and it is value-added chicken. We have been a protein-centric company for many, many years. It is a big advantage right now. But chicken has been probably the least of the proteins for us, under 5% historically. With this acquisition, it will now be closer to 13%, even with turkey and beef for our portfolios. Just the fit between the organizations. They are a direct selling organization with a strong reputation, mirrors what we have with our Hormel Foodservice group. They have very complimentary operator relationships, which we have very little current overlap with, and we are looking forward to being able to understand better their expanded innovation and manufacturing capabilities.
They have the five value-added plants and the two R&D centers. Importantly from our perspective, they do not have any harvest. That was not a part of the business we were looking to invest further in. So the value-added emphasis is important. Ultimately, we think there is a great fit between the organizations. Frankly, we are both from small Midwest towns. We are over here in Minnesota, and they are in Wisconsin. A group of us will be heading over tomorrow, actually, to introduce ourselves more broadly to their team, and we are very excited about the transaction.
Great. Maybe one quick follow-up question for Ash. In terms of financing acquisition, in terms of the mix of debt and cash, is that something we will just hear more color about later next year in terms of how you guys will, or in next year in terms of how you guys approach that?
Yeah. Thanks for the question, Rupesh. We have noted that we expect to finance the acquisition through a combination of cash on hand and new debt. Our strong investment-grade credit profile does provide meaningful flexibility for us regarding the timing, maturity, and structure of that financing. You are exactly right. I think we will have more to say on the upcoming calls around the final financing mix and costs, which will be dependent on conditions at time of issuance. But we feel comfortable that this is the right allocation of capital for our long-term strategy and our long-term return generation.
Great. Thank you. I will pass it along.
Your next question is from Heather Jones with Heather Jones Research. Your line is now open. Please go ahead.
Good morning. Thanks for the question. I guess I have a two-part question. I was just wondering, you mentioned that you are not acquiring any slaughter facilities, so wondering how you procure the raw materials. Is that on a cost-plus basis, spot basis? Then wondering, because a lot of times food service business tends to be cost passed through, so just wondering if you could give us a sense of how much of this business has programmatic cost pass-through mechanisms in place. Thank you.
Yeah. Good morning, Heather. Thanks for the question. Brakebush does purchase chicken inputs, and so overall, the business is not immune to changes in chicken costs or supply availability. But the financial performance over time has been very consistent, and that is really because of the array of pricing mechanisms that that business has in place. There are portions of that business that are effectively more on a long-term fixed price basis, and there are several portions that are really more in a stable margin type portfolio, whether that is cost plus or some sort of market minus. Overall, when we look at the business, it is very consistent with the value-added orientation that we see in our own core food service business, and we think we are in a good position to drive value there.
Heather, this is John. To add one comment to that from a commercial perspective in terms of pricing, I would say, broadly speaking, Brakebush utilizes pass-through pricing mechanisms that are similar to our Hormel Foodservice segment that we've discussed before, which helps with movements up and down in the chicken markets. The timing of those pass-through mechanisms can vary by contract, but that's the general approach.
Okay. Thank you for that. A follow-up is just wanted to. I missed part of the comment on expecting accretion in fiscal 2028. Did I hear you all say that's going to be adjusted for increased amortization, or I wasn't sure if I understood that correctly.
Great question, Heather. Big picture, no. That's just an adjusted earnings basis, but not necessarily adjusted specifically for amortization there. I should note, we fully expect Brakebush to contribute substantially for fiscal 2027, but the first year in particular does reflect financing costs associated with the transaction, some of the purchase price accounting effects, and the limited realizations of those cost synergies. When we take those factors into account, we fully expect the acquisition to become solidly accretive to adjusted EPS beginning in fiscal 2028.
Okay. Thank you so much.
Your next question is from Peter Galbo with Bank of America. Your line is now open. Please go ahead.
Great. Thanks. Good morning, everybody. Ash, welcome. I guess as hard as you tried to run away from chicken, it found you again. There's that. Jeff, I was wondering if you could start off, this deal is, I think, consistent with the successful deals that Hormel has done in the past from a Foodservice perspective. It's a little bit larger, I think, than what you would have done historically in that segment. Maybe you could just compare and contrast it against some of the more recent Foodservice deals that you all have done, that you were therefore, at least were privy to on Fontanini and Sadler's, and how we might think about it in that context.
Yeah. Thanks for the question, Peter. It has been about five years since the company's last major acquisition, and we obviously take a disciplined approach to M&A. We really saw Brakebush as the right target, the right price at the right time. It does remind us of certain past acquisitions, some of the more successful ones we've had. First, I'll start with some in the Foodservice segment, as you referenced. We had Fontanini, we've had Sadler's. Even before that, there was Burke. These are brand names within the Foodservice world and had a reputation coming in that we've been able to really build on. They're not known as consumer brands, but they're important differentiated points within the business.
They each came with new capabilities and capacity and operator-first solutions, and in each case, we were very careful to be respectful of what the team had built up. In many cases, we blended our team with their team over time. Our Foodservice team definitely has a history of successfully delivering on M&A acquisition. I also see some similarities with our Applegate acquisition. To me, when I think about that one 11 years ago, we kind of looked strategically at the category and said, "Hey, look, this organic, natural, antibiotic-free area is important. It's growing. It's not a fad. We really ought to be getting into that." You then make sort of the build versus buy decision. In that case, we thought we were the wrong brand.
You look at a company like Applegate, they had over 150 relationships with farms and other suppliers key to that area. It just was very much move the needle toward, hey, if we could find the right partner, that's the way we go, and we did with Applegate, and we've done really wonderfully with that business. We see Brakebush in the same light. In terms of size, I guess to me, I think historically, some of our better acquisitions have been in sort of the high hundreds of millions. This one presses slightly over $1 billion, but I think it's in that same network, whether it's SKIPPY or Applegate and Fontanini, et cetera. So, I think we're comfortable with this level. It's big enough to move the needle, but not so big that we think it adds more risk.
Okay, great. Thanks for that, Jeff. John, I was hoping to get a little bit more color on just the overall customer mix for Brakebush. Understanding it's 90% foodservice, but if I think about the historical Hormel Foodservice model, it's super diversified. It's in a lot of channels that I guess qualify as foodservice, but we may not traditionally think of. So maybe you just help us think about the customers that Brakebush is currently serving and whether or not that has a material change in terms of your overall foodservice portfolio going forward. Thanks very much.
Yeah. Thank you, Peter. So I would say that Brakebush has a pretty diverse and really strong balance across their current business in terms of channel and customer profile. If you're thinking about strength within national and regional accounts, think about areas like restaurants, certainly some healthcare. There is some retail business within Brakebush today. So very, I would say, deep, strong customer relationships across a number of different areas. If you then step back and look at Hormel, we obviously have a very broad set of channels and customers broadly across away from home. That includes a lot of street business or independent regional business, as well as strong customer relationships in some different areas, commercial and non-commercial. Then we obviously have a very broad retail mix of customers and channels.
We see a lot of opportunity putting those pieces together in terms of the growth momentum we see for value-added chicken across away from home channels as well as retail channels, frankly. So we see a lot of opportunities to kind of take advantage of the best of both in that sense. So, very complimentary.
Great. Thanks.
Your next question is from Tom Palmer with JP Morgan. Your line is now open. Please go ahead.
Good morning. Thanks for the question and I will echo Pete with welcome Ash. Great to meet on the phone. I wanted to maybe just first ask on the growth of this business. If we look back, I guess, in recent years, any framing of maybe how this business has grown, either top line or maybe more so from a profitability standpoint? Thank you.
Good morning, Tom. It is John. I will take that question. If you kind of step back on this value-added chicken segment and just look at the long-term trends, we see robust demand growth. In the foodservice space, operators increasingly are looking to add more chicken to the menus. What we see underneath that is a couple of things. One, more interest from consumers in chicken in terms of the lean protein characteristics of chicken. Certainly, there has also been a lot of menu innovation around chicken in the foodservice space. When you look broadly across channels, we have just seen a lot of increasing demand for chicken on the menu in foodservice. When you get to the operator side of that and you are looking to add more chicken onto the menu, certainly chicken adds complexity. It takes time in the kitchen.
The desire for easy solutions in the kitchen to get high-quality chicken on the menu is a robust area of growth. If you look back over the past 5+ years, we've seen mid-single digit growth for the category of value-added chicken and foodservice, and we have seen the Brakebush business outperforming that trend. We feel very good about the sustained demand and growth profile of the business. I'll let maybe Ash comment a little bit on margins.
Absolutely. Tom, thank you for the warm welcome. We referenced it a little bit earlier in the call today. What we've seen that Brakebush's margins have been remarkably consistent over time. That consistency really reflects the fact that it is a true value-added business portfolio. A lot of the profit growth has really come from that top-line growth over time. For us, that really reinforces the fact that Brakebush is a true value-added business portfolio rather than a commodity-speed business. As it's been growing, it's been able to outpace category growth, reflecting the truly differentiated capabilities, the customer intimacy, and the true on-trend value-added capabilities that they bring to the marketplace.
As we look ahead, I think we see great opportunities to continue to drive both that top line and margin expansion, particularly as we think about shifting mix within our portfolio and some of the cost synergies that we referenced in today's announcement.
Oh, great. Thanks for the details. Also, maybe a little bit of color on how the deal came about. It does seem to be a pretty family-involved business. On their website, the executive team includes a lot of Brakebushes, I think. Maybe a little color on both how the deal came about and the managerial structure as we look at it on a go-forward basis, just with that family involvement.
Sure. This is Jeff. I will start with that. I can start with it because I can tell you that we have had an interest in Brakebush since way back when I was here before. We literally have talked with them for over two decades. In 100-year-old business, it is obviously a huge decision that they made to go the route of partnering with another company, and we are very proud that they picked us to be that partner. We have had good experience in the past with honoring the cultures of family-owned businesses. Years ago, back at Jennie-O, when we acquired The Turkey Store and the Jerome family and integrated with. We ended up with people from that group and senior leadership at Hormel here at the corporate office, ultimately. There are people from Fontanini still with the organization. There are people from Burke still with the organization.
At Applegate, I had the chance earlier this year to go back in there and see that half of the team at Applegate was there 10 years ago. They stayed with it after Hormel, and there was folks that, "Oh, gee, you guys seem like you have different cultures. This could be at risk." That to me is a huge benefit to this. The fact that we are 135-year-old company with a foundation behind us that keeps us in a strong, protected position with a very long-term orientation. We share that with the Brakebush family, and I think it will just be a great relationship going forward.
Yeah. Just to build on that, I would say from the standpoint of the go-forward approach is we love the company we are buying. That includes the culture, the talent, the people. Brakebush is a highly successful, well-run company. We believe our cultures, to Jeff's point, are highly aligned. If you think about our focus with our customers around quality, innovation, customer service, we see great alignment there. Brakebush has a proven business model that we intend to preserve. We talked about having Brakebush run as a subsidiary, reporting into our Foodservice segment, and our intention would be to keep it moving and keep it rolling.
Great. Thank you.
As a reminder, if you would like to ask a question, please press star, then the number one on your telephone keypad. Your next question is from Ben Theurer from Barclays. Your line is now open. Please go ahead.
Yeah. Good morning, and thank you very much for taking my question. I will just follow up as well. Ash, welcome. Good luck with chicken again. It was a good one from Pete. My very first question really is about, obviously, as you are having experience in the chicken business, and usually most chicken companies are actually more on the vertically integrated side. There is a lot of emphasis here on not being vertically integrated. Where do you see the advantages of not being integrated versus maybe some of the disadvantages as it relates to the projectability and the visibility of flow? Help us just a little bit understanding why you think there is value in being not integrated for what tends to be in the industry, a more integrated approach.
Understood. Ben, thank you for the kind welcome as well. You have hit the key point here, which was we look at Brakebush, it is not vertically integrated, and we see that primarily as a feature and something that we are excited to be adding to our portfolio. It really allows this team to focus on further processing, product development and innovation, and really insulates it from some of the volatility that we see in upstream poultry production. It is also very well aligned to our own value-added protein network and our own approach to offering protein solutions to the marketplace. When we looked at Brakebush, and to your point in the chicken industry, this is truly a unique asset. Opportunities to acquire scaled, non-vertically integrated, value-added chicken platforms come about rarely. As Jeff noted, this acquisition has been on our watch list for more than two decades.
I look at this ultimately as not just an opportunity to increase our exposure to chicken, it gives us a scaled operating platform in a highly attractive category. It strengthens our already differentiated Foodservice business and puts us in a spot to win for years to come.
Perfect. Then just my follow-up question. Obviously, it is going to be a broadening of your exposure within Foodservice, new categories, et cetera. Just wondering, there's still a little bit of retail left. What is your thought on that? Are you just going to keep that going and actually recognize it in Foodservice? Is that going to be thrown over into the retail business? We're talking just about maybe $10 million of EBITDA, but was just wondering what are your plans as it relates to the retail portion of the business that comes in?
Yeah, Ben. Good morning. It's John. I'll start us off on that one. If I just step back and look at the business, to your point, it is vast majority Foodservice today. The vast majority of what we see as the go-forward approach is to really run the business and drive growth and expansion through our Foodservice segment, and that will be our focus. Certainly, if you look at the channel profile of the business and compare it to some of the channel opportunities we have on Hormel Foodservice, we see a lot of opportunity and potential. That being said, you also know we have a very broad set of customers on the retail side. There's a lot of consumer momentum for poultry and for chicken in particular on the retail side.
We are going to look at both pieces of business and look for expansion opportunities. But in the near term, the business will report into our Foodservice segment.
Perfect. Thanks, John.
Your next question is from Pooran Sharma with Stephens. Your line is now open. Please go ahead. Pooran, just letting you know that your line is now open, so you can go ahead with your question.
Sorry about that. Good morning. Thanks for the question. Just wanted to start off understanding the profitability structure with a bit more granularity. Understand from your prior comments that you are pretty stable and you are seeing expansion from the top line. As we are thinking about modeling this into our numbers, would you expect the profitability profile of Brakebush to be accretive relative to your existing Foodservice EBIT margins, or should we think of them as being dilutive? How does that evolve as synergies are realized?
Good morning, Pooran. Thanks for the question. When you look at the overall EBITDA margins of this business, while they remain solid over time, we recognize that they are ultimately, and they have ultimately been very stable, as you referenced, which reflects the value-added nature of that portfolio. They are still at a discount to our very healthy margins within our core Foodservice business. As we think about that overall portfolio, we expect that it will have an impact in terms of merging those pieces together. What we are excited about, though, is less about the margin focus and more about our ability to unlock value over time. We have talked about the cost synergies that we are seeking to pursue, which we feel very confident in and have been conservative around our publicly stated targets. John has also referenced how we are thinking about upgrading the mix over time.
Really by putting these two companies together, we feel comfortable that we will be able to get the Brakebush acquisition to a margin profile that continues to look closer and closer to our core Foodservice portfolio as well.
Appreciate the color there, Ash. I guess on that, the potential commercial opportunity, the synergy opportunity from operational and commercial, it sounds like you have little overlap. Is it fair to characterize that bucket as potentially being greater than the cost realization itself?
Yeah. I would say that we are very focused on unlocking the commercial opportunities around the business. That is definitely the case. That being said, Brakebush is a company with a lot of momentum. They've demonstrated consistent growth over time, separate and apart from any involvement with Hormel Foods. So, number one is keep that execution going, keep that growth profile going. Number two is, we're going to learn from each other. We're going to look for opportunities to open up additional growth that neither company would have been able to access alone. So that'll be something we work on together as we go forward. Then I think, on top of that, there are synergies out there. If you think about manufacturing, if you think about procurement, we do see some clear opportunities for us to get more efficient on the business as well.
That's how I would think about the structure of it.
Great. Thank you very much.
There are no further questions at this time. I will now turn the call back over to John for closing remarks.
Well, thank you. I just wanted to take a moment to close us out. I want to thank everyone for their interest, for joining this morning on this very exciting day for Hormel Foods and for the Brakebush Company, and we appreciate the interest in the story. Thank you.
This concludes today's conference call. You may now disconnect.