Highlights

  • Acquisition valued at $258 million with $28 million expected tax benefit.
  • Echo Lake reported ~$240 million in 2024 revenue with 10% five-year CAGR.
  • Projected mid-single digit EPS accretion in fiscal year 2026 from synergies.

Cal-Maine Foods, Inc. (NASDAQ: CALM) announced the completion of its $258 million all-cash acquisition of Echo Lake Foods, a producer and distributor of ready-to-eat egg products and breakfast foods. The deal includes a projected $28 million tax benefit, resulting in an effective purchase price of approximately $230 million.

Echo Lake Foods reported revenues of about $240 million in 2024, with a compound annual growth rate (CAGR) of approximately 10% over the past five years. The acquisition provides Cal-Maine with access to value-added egg products such as scrambled eggs, egg patties, omelets, waffles, and pancakes—expanding beyond its traditional shell egg business.

The transaction enables Cal-Maine to enter new food service and retail channels with a diversified product portfolio. The company expects the acquisition to generate an estimated $15 million in annual synergies, driven by efficiencies in egg sourcing and SG&A cost reductions. These synergies are anticipated to result in mid-single digit percentage accretion to earnings per share (EPS) by fiscal year 2026.

Cal-Maine highlighted the acquisition’s alignment with its long-term strategic goals, which include reducing earnings volatility and broadening its customer base. Echo Lake’s existing relationships with retail and quick-service restaurant chains are seen as complementary to Cal-Maine’s distribution infrastructure.

No changes to current financial guidance were announced, and the transaction was supported by Goldman Sachs & Co. LLC as financial advisor and Sidley Austin LLP as legal counsel to Cal-Maine.

The integration will include Echo Lake’s leadership, with Kathy Brodhagen joining Cal-Maine’s executive team. The acquisition marks a significant step in Cal-Maine’s expansion into prepared foods, as competition and market dynamics in the egg sector continue to evolve.