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AUSTIN EDITION - Sale to Hormel a roller-coaster ride

By Jeff Kiger

jkiger@postbulletin.com

Selling a 73-year-old family business is not a move made lightly.

Joe Clougherty, the president of Clougherty Packing Co., said the move to sell to Austin-based Hormel Foods Corp. required a lot of discussion and consideration.

The sale was announced Thursday morning.

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"It was a very, very tough decision for the family. I think it was the right decision," he said of the selling the pork processor that markets the Farmer John brand of products and creates the famous Dodger Dogs for Dodger Stadium.

"It has been a roller-coaster ride, Clougherty said.

Hormel first approached the family about buying the Los Angeles-based processor -- the largest in California -- in May. This summer, Joe Clougherty visited Austin with his brothers Bernie and Anthony.

After seeing Hormel's management approach up close and approving how it would fit with Clougherty's management, it was "just rolling up our sleeves and getting it done," he said.

In the end, the deal was wrapped up about 10:45 p.m. Wednesday in Los Angeles after dinner with Hormel CEO Joel Johnson.

Hormel paid about $186 million for the company. The current management team, including the Clougherty brothers, will stay on to run the day-to-day operations.

The company is projecting sales of $420 million in 2004.

Joe Clougherty said no changes are expected for the company's 1,200 employees, and that was an important factor for the family when considering the sale.

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One thing that might change is that the Farmer John brand of hot dogs, bacon and sausage might find a wider audience. The brand is sold in California and other southwestern states.

"We may move a little east, a little north, said Clougherty. "Hormel believes as we do that the Farmer John brand has legs."

One place Farmer John certainly will stay is Dodger Stadium. That is where the company has been selling the famous "Dodger Dogs" since 1958. The 101⁄2; " dogs remain popular and sell at a rate of almost one per spectator. The stadium typically leads the baseball league in hot dog sales, the company said.

Clougherty Foods processes the Farmer John line at a 900,000-square-foot plant in Vernon, Calif.

"We bring animals in, and they go out the front door as meat products," Joe Clougherty said.

The plant can process up to 7,500 hogs a day, and is currently running 6,800 to 7,100 hogs through daily, he said.

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