Conagra Brands, Inc. (CAG) Sells Chef Boyardee Brand to Hometown Food for $600M

On Tuesday, Conagra Brands, Inc. (NYSE:CAG) finalized the sale of its Chef Boyardee brand to Hometown Food Company for $600 million in cash. The transaction includes the manufacturing facility in Pennsylvania and all operations tied to Chef Boyardee’s shelf-stable offerings. As per the licensing agreement, however, the company will retain the frozen skillet meals under the same brand.

A worker assembling a meal in a food production facility.

The sale reflects an ongoing portfolio recalibration strategy, adopted by the company to narrow its focus on higher-margin categories. The divestiture might also be part of a response to slowing sales growth and declining operational efficiencies within the company’s legacy canned pasta segment.

While the transaction gives Conagra Brands, Inc. (NYSE:CAG) an immediate liquidity boost, it also sheds its long-standing shelf-stable product identity.

Before the announcement, on June 2, Wells Fargo cut its price target on Conagra Brands, Inc. (NYSE:CAG) to $23 from $27, despite retaining an Equal Weight rating. Meanwhile, though the stock’s past week’s performance is down by 0.89%, it was trading at $22.79 in pre-market hours, up 0.15% on the NYSE, signalling moderate investor expectations.

Founded in 1919 and headquartered in Chicago, Conagra Brands, Inc. (NYSE:CAG) is a consumer packaged goods holding company that owns multiple popular consumer food labels, including Healthy Choice, Hunt’s, and Birds Eye.

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