B&G Foods, Inc. (NYSE:BGS) announced today that it has
entered into an agreement to acquire the spices and seasonings
business of ACH Food Companies, Inc., a leading supplier of spices
and seasonings to retail and food service customers, for
approximately $365 million in cash, subject to a post-closing
inventory adjustment. The ACH spices and seasonings business
includes the Spice Islands, Tone’s and Durkee brands. The
business also includes Weber brand sauces and seasonings, which are
sold under license. As part of the acquisition, B&G Foods is
also acquiring a manufacturing facility in Ankeny, Iowa.
B&G Foods expects the acquisition to close during the
fourth quarter of 2016, subject to customary closing conditions,
including the receipt of regulatory approvals.
“We are very pleased to add ACH’s spices and seasonings
business, including the Spice Islands, Tone’s, Durkee and
Weber brands to the B&G Foods portfolio. This acquisition will
significantly broaden our position in the large and growing spices
and seasonings category, which we believe is very relevant to
today’s consumer, who is looking for healthier options, simple
ingredients and enhanced flavor,” stated Robert C. Cantwell,
President and Chief Executive Officer of B&G Foods.
Mr. Cantwell continued, “Consistent with our acquisition
strategy, we expect the acquisition to be immediately accretive to
our earnings per share and free cash flow.”
B&G Foods projects that beginning in 2017, the acquired
business will generate on an annualized basis net sales in the
range of $220.0 million to $225.0 million, adjusted EBITDA in the
range of $38.0 million to $40.0 million and adjusted diluted
earnings per share in the range of $0.26 to $0.28. Because the
acquisition will be structured as an asset purchase, B&G Foods
expects to realize approximately $83.0 million in tax benefits on a
net present value basis. At the midpoint of B&G Foods’ 2017
projected adjusted EBITDA for the business, the acquisition
represents a purchase price multiple of approximately 9.4 times
adjusted EBITDA (or 7.2 times adjusted EBITDA net of expected tax
benefits).
B&G Foods intends to fund the acquisition and related
fees and expenses with cash on hand, including the net proceeds of
its August 2016 public offering of common stock, and additional
revolving loans under its existing credit facility.
About B&G Foods, Inc.
B&G Foods and its subsidiaries manufacture, sell and
distribute a diversified portfolio of high-quality, branded
shelf-stable and frozen foods across the United States, Canada and
Puerto Rico. Based in Parsippany, New Jersey, B&G Foods’
products are marketed under many recognized brands, including
Ac’cent, B&G, B&M, Baker’s Joy, Bear Creek Country
Kitchens, Brer Rabbit, Canoleo, Cary’s, Cream of Rice,
Cream of Wheat, Devonsheer, Don Pepino, Emeril’s,
Grandma’s Molasses, Green Giant, JJ Flats, Joan of Arc,
Las Palmas, Le Sueur, MacDonald’s, Mama Mary’s, Maple Grove
Farms, Molly McButter, Mrs. Dash,
New York Flatbreads, New York Style, Old London,
Original Tings, Ortega, Pirate’s Booty, Polaner, Red Devil,
Regina, Sa-són, Sclafani, Smart Puffs, Spring Tree, Sugar
Twin, Trappey’s, TrueNorth, Underwood, Vermont Maid and
Wright’s. B&G Foods also sells and distributes Static Guard, a
household product brand.
About Non-GAAP Financial Measures and Items Affecting
Comparability
“EBITDA” (net income before net interest expense, income taxes,
depreciation and amortization and loss on extinguishment of debt),
“adjusted EBITDA” (EBITDA as adjusted for cash and non-cash
acquisition-related expenses, gains and losses (which may include
third party fees and expenses, integration, restructuring and
consolidation expenses and amortization of acquired inventory fair
value step-up) and certain other items described from time to time
in the Company’s SEC filings and earnings releases); and “adjusted
diluted earnings per share” (reported diluted earnings per share
adjusted for certain items that affect comparability, including
cash and non-cash acquisition-related expenses, gains and losses
(which may include third party fees and expenses, integration,
restructuring and consolidation expenses and amortization of
acquired inventory fair value step-up)), are “non-GAAP financial
measures.” A non-GAAP financial measure is a numerical measure of
financial performance that excludes or includes amounts so as to be
different than the most directly comparable measure calculated and
presented in accordance with GAAP in B&G Foods’ consolidated
balance sheets and related consolidated statements of operations,
comprehensive income, changes in stockholders’ equity and cash
flows. Non-GAAP financial measures should not be considered in
isolation or as a substitute for the most directly comparable GAAP
measures. The Company’s non-GAAP financial measures may be
different from non-GAAP financial measures used by other
companies.
B&G Foods provides earnings guidance only on a non-GAAP
basis and does not provide a reconciliation of the Company’s
forward-looking adjusted EBITDA and adjusted diluted earnings per
share guidance to the most directly comparable GAAP financial
measures because of the inherent difficulty in forecasting and
quantifying certain amounts that are necessary for such
reconciliations, including adjustments that could be made for
acquisition-related expenses, gains and losses and other charges
reflected in the Company’s reconciliation of historic non-GAAP
financial measures, the amounts of which, based on past experience,
could be material.
Forward-Looking Statements
Statements in this press release that are not statements of
historical or current fact constitute “forward-looking statements.”
The forward-looking statements contained in this press release
include, without limitation, statements related to the planned
acquisition of the spices business of ACH Food Companies, Inc. and
the timing and financing thereof; the expected impact of the
planned acquisition, including without limitation, the expected
impact on B&G Foods’ earnings per share, net sales,
adjusted EBITDA and free cash flow, and the expected tax benefits
of the acquisition. Such forward-looking statements involve known
and unknown risks, uncertainties and other unknown factors that
could cause the actual results of B&G Foods to be
materially different from the historical results or from any future
results expressed or implied by such forward-looking statements. In
addition to statements that explicitly describe such risks and
uncertainties readers are urged to consider statements labeled with
the terms “believes,” “belief,” “expects,” “projects,” “intends,”
“anticipates” or “plans” to be uncertain and forward-looking.
Factors that may affect actual results include, without limitation:
whether and when the required regulatory approvals will be
obtained, whether and when the other closing conditions will be
satisfied and whether and when the transaction and related
financing will close, whether and when the Company will be able to
realize the expected financial results and accretive effect of the
transaction, and how customers, competitors, suppliers and
employees will react to the acquisition. The forward-looking
statements contained herein are also subject generally to other
risks and uncertainties that are described from time to time in
B&G Foods’ filings with the Securities and Exchange
Commission, including under Item 1A, “Risk Factors” in the
Company’s Annual Report on Form 10-K for fiscal 2015 filed on
March 2, 2016 and in its subsequent reports on Forms 10-Q and 8-K.
Investors are cautioned not to place undue reliance on any such
forward-looking statements, which speak only as of the date they
are made. B&G Foods undertakes no obligation to publicly
update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise.
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ICR, Inc.Investor Relations: Dara Dierks, 866-211-8151Media
Relations: Matt Lindberg, 203-682-8214
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