B&G Foods Inc. announced that it has entered into an agreement to acquire the Green Giant and Le Sueur brands, leaders in frozen and canned vegetables, from General Mills Inc. for approximately $765 million in cash, subject to an inventory adjustment at closing.
B&G Foods expects the acquisition to close during the fourth quarter of 2015, subject to customary closing conditions, including the receipt of regulatory approvals.
“We are thrilled to welcome Green Giant and Le Sueur to the B&G Foods family of brands,” said Robert C. Cantwell, president and chief executive officer of B&G Foods. “For over 100 years, Green Giant and Le Sueur have been providing consumers with great tasting, nutritious vegetables picked at the peak of perfection. We look forward to building on that rich history by offering new and innovative products that will respond to the needs of today’s health conscious consumer.
“Consistent with our acquisition strategy, we expect the acquisition to be immediately accretive to our earnings per share and free cash flow. In addition, the acquisition marks our entry into the frozen food category, which we believe will open many future growth opportunities,” said Cantwell.
B&G Foods projects that following a six- to 12-month transition period, the Green Giant and Le Sueur brands will generate on an annualized basis net sales of approximately $550 million, adjusted EBITDA of approximately $95 million to $100 million and earnings per share of $0.60. Because the acquisition will be structured as an asset purchase, B&G Foods expects to realize approximately $137 million in tax benefits on a net present value basis.
Green Giant has been implementing sustainability into the business since 1929 when it introduced vacuum-pack technology, and Green Giant has plans to continue to become “greener” in the future.
B&G Foods intends to fund the acquisition and related fees and expenses with additional revolving loans and new incremental terms loans under its existing credit facility. B&G Foods has received financing commitments from Barclays Bank PLC, BofA Merrill Lynch, and RBC Capital Markets. Barclays and RBC Capital Markets acted as financial advisors to B&G Foods.
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