US-based packaged foods company Pinnacle Foods has entered into an agreement to acquire Boulder Brands for $975m, in a move that signifies the former’s expansion into health and wellness segments.
The acquisition is expected to enhance Pinnacle's presence in natural and organic retail channels and also provide a growth platform in refrigerated foods segment.
Under the acquisition agreement, Pinnacle Foods plans to make a tender offer to takeover all the outstanding shares of Boulder Brands for $11 per share, for a value of $975m, inclusive of $265m net debt.
The closure of the acquisition is subject to customary and regulatory approvals. The acquisition process is expected to be completed in the first quarter of 2016.
Pinnacle Foods CEO Bob Gamgort said: "The acquisition of Boulder Brands further expands our health and wellness portfolio, currently anchored by the Birds Eye and gardein brands. In addition to being a synergy-rich, accretive transaction with on-trend brands, the acquisition provides us with an important health and wellness talent pool in Boulder, Colorado. In this regard, we plan to retain Boulder's existing headquarters location."
Boulder Brands chairman Dean Hollis said: "After a thorough review of strategic alternatives to enhance shareholder value, we are pleased to provide our shareholders with immediate and substantial cash value. In addition to shareholder value, this combination provides significant benefits for all stakeholders. Boulder Brands' purpose has been to 'lead change and improve lives' and today marks an important milestone in that journey.
"Together with Pinnacle Foods, Boulder Brands will have additional and stronger resources to drive our brands and deliver value to customers and consumers, while providing new opportunities for employees. We expect a seamless transition and look forward to accelerating our growth across an impressive collection of health and wellness brands as part of Pinnacle Foods."
Boulder Brands produces health and wellness brands that include Udi's and Glutino gluten-free products, EVOL natural frozen meal offerings, and Smart Balance and Earth Balance refrigerated and shelf-stable spreads businesses. The brands are sold in conventional, natural and organic channels across the US.
The acquisition will be funded on cash and new debt basis. Over the next two years, Pinnacle hopes to enhance Boulder's portfolio. The company expects to increase Boulder Brands' adjusted EBDITA of $62m by around 50% using a combination of synergies identified cost savings, compensated by the impact of portfolio optimization that Pinnacle plans to take up.
Image: Boulder Brands' frozen foods portfolio to get boosted with Pinnacle Foods acquisition. Photo: Courtesy of Ambro/FreeDigitalPhotos.net.
