Tara Lachapelle is a Bloomberg Gadfly columnist covering deals. She previously wrote an M&A column for Bloomberg News.

Hillshire Brands is the wind beneath Tyson Foods' chicken wings. 

Meatier Profits
Tyson Foods' margins are improving, in part thanks to a smart deal for Hillshire Brands two years ago.
Source: Bloomberg

The $30 billion poultry and beef producer acquired Hillshire in August 2014 to add more profitable prepared food products that would help offset the volatility of its own commodity-driven livestock business. The deal was well-timed as Tyson had just gone through some years of high feed costs eating into its margins, and products like Hillshire's packaged sliced deli meats and its Jimmy Dean branded breakfast sausage were gaining popularity with consumers. Now, it's paying off.

Moo-ve Over, Beef
While beef still accounts for the biggest chunk of Tyson Foods' revenue, chicken and prepared foods gained from its Hillshire Brands acquisition are driving profit.
Source: Tyson Foods filing, Bloomberg
For quarter ended July 2

Tyson reported third-quarter earnings Monday morning that beat analysts' estimates, as did its forecast for year-end profit. Investors have been looking for wider margins, and while a decline in animal-feed costs certainly helped, having Hillshire's prepared foods in the mix was another big plus.

Tyson paid more than $8 billion for Hillshire Brands, or about 19 times trailing 12-month Ebitda -- a big multiple for a food deal its size -- to outbid rival suitor Pilgrim's Pride for the sausage maker. Two years later, it seems it was well worth the price. 

Grade-A Stock
Tyson Foods' shares are beating those of other meat producers and packaged-food giants this year.
Source: Bloomberg

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Tara Lachapelle in New York at

To contact the editor responsible for this story:
Beth Williams at