PARSIPPANY, N.J.--(BUSINESS WIRE)--Sep. 21, 2016--
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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Source: B&G Foods, Inc.
ICR, Inc.
Investor Relations: Dara Dierks, 866-211-8151
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