B&G Foods Inc. has officially completed the acquisition of the broth and stock business of Del Monte Foods Corporation II Inc. and its affiliates. The transaction, valued at approximately $110 million in cash, includes the high-profile College Inn and Kitchen Basics brands.
The acquisition marks a strategic expansion for B&G Foods as it integrates these shelf-stable categories into its existing portfolio of more than 50 brands. The company funded the purchase and related expenses through a combination of cash on hand, including proceeds from recent divestitures, and revolving loans under its current credit facility.
Financial Outlook and Performance Projections
Leadership at B&G Foods expects the transaction to be immediately accretive to earnings per share (EPS), adjusted EBITDA, and free cash flow. On an annualized basis, the company has provided the following performance projections for the newly acquired brands:
Net Sales: Expected to range between $110 million and $120 million.
Adjusted EBITDA: Projected in the range of $18 million to $22 million.
Adjusted Diluted EPS: Expected to range from $0.08 to $0.12.
The deal was structured as an asset purchase, allowing B&G Foods to realize approximately $15 million in tax benefits on a net present value basis. At the midpoint of the projected adjusted EBITDA, the acquisition reflects a purchase price multiple of roughly 5.5 times, or 4.8 times when accounting for the expected tax benefits.
Strategic Integration and Portfolio Expansion
The addition of College Inn and Kitchen Basics strengthens B&G Foods' position in the shelf-stable food category. These brands join a diverse lineup that includes household names such as Crisco, Green Giant, Ortega, and Cream of Wheat.
Based in Parsippany, New Jersey, B&G Foods continues to focus on distributing high-quality branded food products across the United States, Canada, and Puerto Rico. The integration of the broth and stock business is intended to leverage B&G's existing distribution network and manufacturing capabilities to drive long-term growth for the acquired labels.
Operational Continuity
By securing these assets, B&G Foods ensures the continued market presence of two established leaders in the broth and stock segment. The company intends to maintain the quality standards associated with these brands while utilizing its scale to optimize supply chain efficiencies. The transaction highlights B&G Foods' ongoing strategy of acquiring established brands with stable cash flows to enhance shareholder value.
