US-based Hormel Foods has revealed that it sold its CytoSport sports nutrition business to peer PepsiCo for US$465m.

The deal was announced earlier this week but the financial details were not disclosed.

The $465m sale price, revealed in a conference call with analysts to discuss Hormel’s first-quarter results, means it has made a $15m profit on the $450m it paid for the Muscle Milk maker in 2014.

Speaking to analysts, CEO Jim Snee said: “The CytoSport team should be pleased with the gains being made in the innovation space with the creation of the Evolve product line, Muscle Milk bars, and multiple new flavours and formats for the Muscle Milk product line. The team also generated nice growth in the food drug and mass channel. 

“However, it became apparent that Pepsi was the right long-term owner of this business given their expertise and scale in the beverage space. Pepsi has been a long-standing distribution partner of CytoSport and the Muscle Milk brand which puts them in a strong position to grow this dynamic business.” 

Chief financial officer Jim Sheehan, confirming the sale price, said the transaction is expected to close in the second quarter.

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By GlobalData

In its first quarter, Hormel recorded net sales of $2.4bn, up 1.2% year-on-year, while pre-tax earnings of $307m were up by 1%.