Parsippany / NJ. (bgs) B+G Foods Inc. announced that it has completed the acquisition of the iconic Crisco brand of oils and shortening from The J. M. Smucker Company for USD 550 million in cash, subject to a customary adjustment based upon inventory at closing. As part of the acquisition, B+G Foods also acquired a manufacturing facility and warehouse in Cincinnati, Ohio.
B+G Foods expects the acquisition to be immediately accretive to its earnings per share and free cash flow. B+G Foods projects that in 2021, the acquired business will continue to benefit from increased demand due to the Covid-19 pandemic and generate annual net sales of approximately USD 270 million, adjusted Ebitda in the range of USD 65 million to USD 70 million and adjusted diluted earnings per share in the range of USD 0.45 to USD 0.50. Because the acquisition was structured as an asset purchase, B+G Foods expects to realize approximately USD 75 million in tax benefits on a net present value basis. At the midpoint of B+G Foods’ 2021 projected adjusted Ebitda for the business, the acquisition represents a purchase price multiple of approximately 8.1 times adjusted Ebitda (or 7.0 times adjusted Ebitda net of expected tax benefits).
Crisco is the original all‑vegetable shortening that transformed the way people bake and cook over 100 years ago. Crisco is the number one brand of shortening, the number one brand of vegetable oil and also holds a leadership position in other cooking oils and cooking sprays.
B+G Foods funded the acquisition and related fees and expenses with cash on hand and revolving loans under its existing credit facility – as anticipated in a previous statement.