Canada-based marketer and distributor of branded specialty food products Premium Brands has agreed to acquire Freybe Gourmet Foods for $55m.
Freybe, founded in 1844, is one of the leading manufacturers of premium gourmet deli meats in western Canada with annual revenues of about $78m. The company operates a 118,000ft2 production facility in Langley, British Columbia. It is currently owned and operated by the Freybe family.
The transaction, which is subject to customary closing conditions, is expected to be completed shortly. Taluswood Capital acted as financial adviser to Freybe for this transaction.
Premium Brands stated that it will fund the transaction through its senior credit facilities.
Premium Brands president and chief executive officer George Paleologou said that the acquisition will allow the company to further strengthen its deli meats business.
"We will also be adding the Freybe name, which is one of western Canada's oldest and most iconic local brands, to our diverse portfolio of leading specialty food brands," Paleologou said.
"Looking forward, we see significant opportunities to help Freybe grow its business and brand by leveraging both our deli meat platform's sales and marketing infrastructure as well as our proprietary distribution networks in the foodservice and retail channels," Paleologou added.
Premium Brands noted that Freybe's production facility has significant un-utilized capacity and is an ideal solution for replacing the capacity of Premium Brands' deli meats production facility in Richmond, which is scheduled to be shut down later this year.
The company plans to transfer a significant portion of the Richmond plant's production to Freybe's Langley facility, a move which is expected to result in cost and freight synergies. In addition, Premium Brands plans to use Freybe's unutilized production capacity to support its growth in the US through its Washington-based business Hempler Foods Group. In recent years, Hempler has been growing at an average compounded rate of almost 17% over the last three years, according to the company.
Premium Brands owns a wide range of specialty food manufacturing and food distribution businesses with operations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nevada and Washington State.
