US-based food company B&G Foods has completed the acquisition of frozen and canned vegetable Green Giant and Le Sueur brands from General Mills for $765m in cash.
The deal also covers inventory adjustment at closing worth $58m. B&G Foods claims that the acquired brands will help the company generate net sales on an annualized basis of around $550m, with adjusted EBITDA of around $95m to $100m and earnings per share of $0.60.
As the acquisition was modeled as an asset purchase, B&G Foods expects to derive tax benefits on net present value worth $137m.
The Green Giant and Le Sueur brands have a 100 year old history with the vegetables for the brands having been sourced and picked from the Valley of the Jolly Green Giant. Both the brands were initially associated with the Le Sueur and the Minnesota Valley Canning Company.
B&G Foods funded the purchase price, inventory adjustment, initial working capital needs, and other fees and expenses with additional revolving loans and $750m of new incremental term loans under its credit facility.
In September, the company had agreed to acquire the two brands for the agreed price. Back then, the company had said that it expected the deal to be completed during the fourth quarter of 2015, following regulatory approvals.
With this acquisition, B&G Foods intends to foray into frozen food segment, which it has been eyeing for some time. In the bidding process, B&G beat out offers from private investment firms and other competitors.
Image: B&G Foods acquires frozen vegetables brands. Photo: Courtesy of foto76/FreeDigitalPhotos.net.
