B&G Foods, Inc. (NYSE: BGS) announced today that it has
entered into an agreement to acquire the iconic Crisco brand of
oils and shortening from The J.M. Smucker Co. for approximately
$550 million in cash, subject to a post-closing inventory
adjustment. As part of the acquisition, B&G Foods is also
acquiring a manufacturing facility and warehouse in Cincinnati,
Ohio. B&G Foods expects the acquisition to close during the
fourth quarter of 2020, subject to customary closing conditions,
including the receipt of regulatory approvals.
“We are very excited to add the iconic Crisco brand to the
B&G Foods portfolio,” stated Kenneth G. Romanzi, President and
Chief Executive Officer of B&G Foods. “Crisco is an excellent
complement to our existing portfolio of brands, including our
Clabber Girl and other baking powder brands. This acquisition is
consistent with our longstanding acquisition strategy of targeting
well-established brands with defensible market positions and strong
cash flow at reasonable purchase price multiples. Crisco has a
strong heritage, as the original all‑vegetable shortening that
transformed the way people bake and cook over 100 years ago. Crisco
is the number one brand of shortening, the number one brand of
vegetable oil and also holds a leadership position in other cooking
oils and cooking sprays.”
Mr. Romanzi 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 in 2021, the acquired business will
continue to benefit from increased demand due to the COVID-19
pandemic and generate annual net sales of approximately $270
million, adjusted EBITDA in the range of $65 million to $70 million
and adjusted diluted earnings per share in the range of $0.45 to
$0.50. Because the acquisition will be structured as an asset
purchase, B&G Foods expects to realize approximately $75
million in tax benefits on a net present value basis. At the
midpoint of B&G Foods’ 2021 projected adjusted EBITDA for the
business, the acquisition represents a purchase price multiple of
approximately 8.1 times adjusted EBITDA (or 7.0 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 and revolving loans under its
existing credit facility.
About B&G Foods, Inc.
Based in Parsippany, New Jersey, B&G Foods and its
subsidiaries manufacture, sell and distribute high-quality, branded
shelf-stable and frozen foods across the United States, Canada and
Puerto Rico. With B&G Foods’ diverse portfolio of more than 50
brands you know and love, including Back to Nature, B&G,
B&M, Cream of Wheat, Dash, Green Giant, Las Palmas, Le Sueur,
Mama Mary’s, Maple Grove Farms, New York Style, Ortega, Polaner,
Spice Islands and Victoria, there’s a little something for
everyone. For more information about B&G Foods and its brands,
please visit www.bgfoods.com.
About Non-GAAP Financial Measures and Items Affecting
Comparability
“Adjusted diluted earnings per share” (diluted earnings per
share adjusted for certain items that affect comparability,
including cash and non-cash acquisition/divestiture-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)); “EBITDA”
(net income before net interest expense, income taxes, depreciation
and amortization and loss on extinguishment of debt), and “adjusted
EBITDA” (EBITDA as adjusted for cash and non-cash
acquisition/divestiture-related expenses, gains and losses (which
may include third party fees and expenses, integration,
restructuring and consolidation expenses, amortization of acquired
inventory fair value step-up and gains and losses on the sale of
assets), non-recurring expenses and certain other items described
from time to time in the Company’s SEC filings and earnings
releases) 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 generally accepted accounting principles in the United States
(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 deferred taxes; loss on extinguishment
of debt; adjustments that could be made for
acquisition/divestiture-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 Crisco brand 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, adjusted diluted earnings
per share 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,” “assumes,” “could,” “should,” “estimates,”
“potential,” “seek,” “predict,” “may,” “will,” or “plans” and
similar references to future periods 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 acquisition
will close, whether and when the Company will be able to realize
the expected financial results and accretive effect of the
acquisition, and how customers, competitors, suppliers and
employees will react to the acquisition; the impact of the COVID-19
pandemic on the Company’s business, including, without limitation,
the ability of the Company and its supply chain partners to
continue to operate manufacturing facilities, distribution centers
and other work locations without material disruption; the Company’s
substantial leverage; the effects of rising costs for the Company’s
raw materials, packaging and ingredients; crude oil prices and
their impact on distribution, packaging and energy costs; the
Company’s ability to successfully implement sales price increases
and cost saving measures to offset any cost increases; intense
competition, changes in consumer preferences, demand for the
Company’s products and local economic and market conditions; the
Company’s continued ability to promote brand equity successfully,
to anticipate and respond to new consumer trends, to develop new
products and markets, to broaden brand portfolios in order to
compete effectively with lower priced products and in markets that
are consolidating at the retail and manufacturing levels and to
improve productivity; the risks associated with the expansion of
the Company’s business; the Company’s possible inability to
identify new acquisitions or to integrate recent or future
acquisitions or the Company’s failure to realize anticipated
revenue enhancements, cost savings or other synergies; tax reform
and legislation, including the effects of the U.S. Tax Cuts and
Jobs Act and the U.S. CARES Act; the Company’s ability to access
the credit markets and the Company’s borrowing costs and credit
ratings, which may be influenced by credit markets generally and
the credit ratings of the Company’s competitors; unanticipated
expenses, including, without limitation, litigation or legal
settlement expenses; the effects of currency movements of the
Canadian dollar and the Mexican peso as compared to the U.S.
dollar; the effects of international trade disputes, tariffs,
quotas, and other import or export restrictions on the Company’s
international procurement, sales and operations; future impairments
of the Company’s goodwill and intangible assets; the Company’s
ability to successfully complete the implementation of additional
modules and the integration and operation of a new enterprise
resource planning (ERP) system; the Company’s ability to protect
information systems against, or effectively respond to, a
cybersecurity incident or other disruption; the Company’s
sustainability initiatives and changes to environmental laws and
regulations; and other factors that affect the food industry
generally. 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
2019 filed on February 26, 2020 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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Investor Relations: ICR, Inc. Dara Dierks 866.211.8151
Media Relations: ICR, Inc. Matt Lindberg 203.682.8214
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