Cal-Maine Foods Finalizes Acquisition of Echo Lake Foods
RIDGELAND, Miss. – Cal-Maine Foods, Inc. (NASDAQ: CALM), the largest producer and marketer of shell eggs in the United States, has officially completed its acquisition of Echo Lake Foods, a move designed to significantly expand its presence in the value-added food products segment.
The transaction, initially announced in April 2025, involved the purchase of Echo Lake Foods in an all-cash deal valued at approximately $258 million. The acquisition is expected to generate a tax benefit of around $28 million, which effectively brings the net purchase price to approximately $230 million. This strategic investment represents a major milestone for Cal-Maine Foods as it looks to diversify beyond traditional shell egg production and strengthen its foothold in the ready-to-eat egg and breakfast foods industry.
Echo Lake Foods: A Strategic Addition to the Cal-Maine Portfolio
Echo Lake Foods is a well-established player in the food manufacturing industry, known for its high-quality ready-to-eat egg products and a wide variety of breakfast items. These include scrambled eggs, omelets, egg patties, diced eggs, frozen waffles, pancakes, and toast. The company has built a strong reputation for supplying both retail and foodservice markets with consistent, high-quality products that align with evolving consumer preferences.
In fiscal year 2024, Echo Lake Foods generated annual revenues of approximately $240 million and achieved a five-year compound annual growth rate (CAGR) of about 10%. This track record of consistent revenue growth, coupled with a diversified customer base that includes national retailers, quick-service restaurants (QSRs), and institutional foodservice providers, makes Echo Lake an attractive acquisition for Cal-Maine Foods.
Strategic Rationale and Synergistic Value
Cal-Maine’s leadership views the acquisition as a pivotal step in executing its long-term growth strategy. With shifting consumer habits emphasizing convenience, protein-rich diets, and prepared meal options, the ready-to-eat egg product segment represents a stable and growing market. By acquiring Echo Lake Foods, Cal-Maine is positioning itself to take advantage of this sustained demand.
Sherman Miller, President and CEO of Cal-Maine Foods, expressed strong enthusiasm for the acquisition and what it represents for the company’s future. “The addition of Echo Lake Foods advances our stated strategy to expand and diversify our product portfolio and customer mix,” Miller said. “Echo Lake Foods is a leading innovator with a long history of providing quality ready-to-eat egg products and breakfast foods to a blue-chip customer base.”
Miller further emphasized the complementary nature of the two businesses. “The combined product lines and capabilities of the two companies are highly synergistic, and importantly, we share a commitment to operational excellence and delivering consistent value to our customers.”
The acquisition also enhances Cal-Maine’s ability to develop strategic customer relationships across multiple sales channels. With Echo Lake’s established ties to retailers, QSRs, and institutional foodservice, Cal-Maine will be able to deepen its market penetration and offer a broader range of products tailored to various customer segments.
Financial Upside and Expected Benefits
From a financial perspective, the acquisition is expected to deliver robust returns. One of the key benefits is the potential to unlock an estimated $15 million in annual synergies. These savings are anticipated to arise primarily from streamlined egg procurement, optimized supply chain integration, and reductions in selling, general, and administrative (SG&A) expenses.
Additionally, Cal-Maine expects the transaction to be accretive to earnings per share (EPS) by a mid-single-digit percentage by the fiscal year 2026, once synergies are fully realized. The company believes this acquisition not only broadens its growth potential but also helps mitigate some of the earnings volatility typically associated with commodity-based businesses like shell egg production.
“This acquisition meets all of our disciplined investment criteria,” said Miller. “It checks key boxes including expansion into attractive geographic markets, potential for operational synergies, a complementary product mix, proximity to major customers, and compelling financial returns.”
Leadership and Integration Plans
As part of the integration process, Echo Lake Foods’ leadership and staff will join the Cal-Maine Foods organization. Notably, Kathy Brodhagen, a key executive at Echo Lake, will join Cal-Maine’s leadership team, bringing with her extensive experience in food operations, customer relations, and innovation in breakfast product manufacturing.
“We are excited to welcome Kathy Brodhagen and the entire Echo Lake team to Cal-Maine Foods,” said Miller. “They have built an outstanding business, and we are confident that working together will enhance our capabilities, support a smooth transition, and help us deliver greater value to both customers and shareholders.”
Cal-Maine Foods is taking a thoughtful and strategic approach to integration, ensuring minimal disruption to Echo Lake’s operations and customer service. The company plans to leverage its extensive national distribution network and sales expertise to scale the Echo Lake product line and expand its reach across existing and new markets.
Advisors on the Deal
To support the successful execution of the acquisition, Cal-Maine Foods engaged leading advisory firms. Goldman Sachs & Co. LLC acted as the exclusive financial advisor to Cal-Maine, providing transaction guidance and valuation support. Legal advisory services were provided by Sidley Austin LLP, Cal-Maine’s lead legal counsel for the transaction.
Looking Ahead: Building the Future of Convenient Egg-Based Foods
This acquisition represents a bold step forward for Cal-Maine Foods, which has traditionally been focused on the production and distribution of shell eggs. By moving into the value-added segment of the egg industry, Cal-Maine is adapting to consumer trends favoring convenience, protein-rich meals, and pre-prepared food solutions.
As Cal-Maine continues to evolve, the addition of Echo Lake Foods will serve as a foundation for further innovation and expansion in the ready-to-eat space. With a broader product portfolio, a strengthened customer base, and new operational capabilities, Cal-Maine is well-positioned to lead in both the traditional and evolving segments of the egg and breakfast foods market.
In conclusion, the acquisition of Echo Lake Foods is a transformative move for Cal-Maine Foods, aligning perfectly with its long-term vision to be a more diversified, resilient, and customer-focused food company. As the company integrates this new business, stakeholders can expect Cal-Maine to unlock new growth opportunities, deliver consistent value, and continue setting the standard in egg and breakfast food innovation.
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