Hormel Foods Corp. is buying Columbus Manufacturing Inc., a premium deli meat and salami company, for $850 million, the largest acquisition in Hormel's history.

Columbus, based in California's Bay Area, makes various types of salami, deli and Italian specialty meats and fashions itself as a "millennial-focused brand."

The deal, announced Tuesday, expands Hormel's reach in the deli and Italian meats market and is the Austin, Minn.-based company's third acquisition this year. In August, Hormel paid $425 million for Fontanini Italian Meats and Sausages, a Chicago-based maker of Italian meats that are sold to restaurants. One week later, Hormel announced it would pay $104 million to buy Cidade do Sol, a Brazilian meat company that sells goods under the Ceratti brand.

Columbus products target younger consumers looking for a quality experience or artisanal offering on their charcuterie plate.

"There is a craft mentality in the production of these products. That's what today's consumer is looking for," Jim Snee, Hormel's chief executive, told investors on a conference call. "The products have a very premium look, very premium feel. That's really why we think this is such a great acquisition."

It also attracted Hormel's attention as a premium offering within the growing deli section of the grocery store. Not only does Columbus make bulk deli meats, but it also has been expanding in the snacking and on-the-go categories with products like prepackaged charcuterie platters and salami-and-cheese trays. The company has grown beyond its West Coast roots and can be found in grocery stores across the Midwest and increasingly on the East Coast, Snee said.

"This acquisition deepens our presence in the deli, which is an advantaged part of today's retail grocery store and one of the fastest-growing segments," Snee said. He added that the premium segment of the deli, where Columbus fits in, has been growing faster than the entire deli section.

Snee said the company will unite Columbus with all of its retail deli businesses — including Hormel, Jennie-O, Applegate and DiLusso — under its refrigerated foods division. Rather than have different sales teams for each brand, retailers will have a single point of contact for all of Hormel's deli brands, he said.

The Columbus deal surpasses all of Hormel's previous acquisitions. It paid $775 million for natural and organic meat maker Applegate Farms in 2015 and $700 million for Skippy peanut butter in 2013. It is even larger than Golden Valley-based General Mills' 2014 purchase of organic macaroni and cheese brand Annie's, a deal often referenced for its high price.

Hormel has been on a buying spree in recent years, making bigger and bigger plays. The company has a solid reputation for integrating its acquisition targets and gaining increased value out of the acquired brands.

The deal is expected to close by the end of 2017. Moving forward, said Snee, the deli business will account for approximately 10 percent of Hormel's overall business.

"This acquisition significantly enhances our scale in the deli by broadening our portfolio of products, customers, and consumers," he said. "I'm excited for the next evolution of our company."

Columbus' total annual sales are about $300 million, with an expected growth rate of more than 5 percent. The company will maintain its California headquarters. Hormel is acquiring two modern processing plants in California as part of the deal.

Hormel is using $100 million in cash, a two-year loan and short-term credit to pay for the deal, said Jim Sheehan, Hormel's chief financial officer. He expects cash will cover the debt within 18 months to two years.

Hormel has a reputation on Wall Street for maintaining a healthy balance sheet with very low debt. Many analysts were pleased by the acquisition news.

"While this is the largest deal in Hormel's history, Hormel has more than enough of balance-sheet flexibility for this acquisition," wrote Brittany Weissman, an Edward Jones analyst. "We are pleased to see Hormel using acquisitions to add to the company's already solid growth profile."