Premium Brands, a company with more than 47 brands under its ownership, is the buyer of Kent-based Oberto, a family-owned meat snack maker.
After a century of making sausage, the Oberto family is selling their namesake business to a large Canadian food conglomerate. But the local management says Oberto’s employees, manufacturing plant and sponsored hydroplanes with the red-white-and-green livery will see few changes.
Premium Brand Holdings, which is based in Richmond, B.C., and owns dozens of food manufacturers and distributors, is set to buy “substantially all” of Oberto Brands’ assets.
Premium said it is paying approximately $188 million to acquire Oberto and, in a separate transaction, to increase its stake in a Vancouver, B.C. based organic processed meats supplier, McLean Meats, to two-thirds from one-third. It did not disclose the price for either company individually.
Oberto said in February it was looking for a buyer or investor to carry forward growth of a brand that is an icon of the Seattle area.
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Constantino Oberto began selling hand-made Italian sausages in 1918. His son, Art Oberto, took it over on his father’s death in 1943 and ran it with his wife, Dorothy, for decades, employing marketing tactics including a vivid Lincoln Town Car, dubbed the “jerky mobile.” They grew the brand to be among the top three in its category nationally today.
“Transitions are always difficult, but we are confident this transaction will best position Oberto for future success,” Art Oberto said in a news release Thursday. The buyer, he added, will “honor the traditions, values and people that are at the heart of Oberto’s success.”
Tom Hernquist, hired as Oberto’s chief executive in 2015, said in an interview that Oberto’s headquarters and manufacturing plant will remain in Kent, and all of its 500 employees are expected to be offered their same jobs with Premium, which had 6,531 employees at the end of 2017.
Hernquist said that a sale was a “more expeditious” way for the company to take advantage of the opportunities it sees in the growing meat snacks industry.
He pointed to new products such as trail mix with chunks of jerky and a peperoni jerky. The company’s products are sold under the brand names Oberto, Pacific Gold, Pacific Gold Reserve, Lowrey’s and Cattleman’s Cut.
Meat snack sales at U.S. retail stores grew 3.5 percent to $2.8 billion in a 12-month period through February 2017, according to market researcher Nielsen — faster than other snacking staples such as potato chips and pretzels.
Premium Brands, Hernquist said, specializes in growing family-owned businesses, allowing them to operate as autonomous units but with access to the larger company’s capital, buying power, distribution networks and sister brands as customers and suppliers.
Premium Brands has been on a buying spree, acquiring part or all of more than 20 companies since July 2015, when it gobbled up another Washington state-based sausage maker, Isernio’s. Premium said two other Washington-based companies, SK Food Group and Hempler Foods Group, have grown from $130 million in 2011 sales to more than $560 million last year under its ownership.
“We fully expect Oberto to replicate this type of success by combining its current strengths with access to our diverse and deep resources,” said Premium Brands chief executive George Paleologou in the news release.
Premium said the combined sales of Oberto and McLean were $195.4 million. That’s a little more than 11 percent of Premium’s 2017 sales of $1.75 billion.
The Oberto sale is expected to close in four to six weeks, the companies said.
Hernquist said he is staying on as CEO and Oberto intends to maintain its involvement in the Seattle community through contributions to Seattle Children’s Hospital and sponsorships of pro sports teams, hydroplanes and Seafair, where it intends to mark its 100th anniversary as a company this year.
“We’re really thrilled to be part of the Seattle history, and that’s an important element to our brand,” he said.