B+G Foods: completes herbs and spices acquisition

Parsippany / NJ. (bgs) B+G Foods Inc. announced that effective immediately it has completed the acquisition of the spices and seasonings business of ACH Food Companies Inc. (ABF Associated British Foods PLC), a leading supplier of spices and seasonings to retail and food service customers, for 365 million USD in cash, subject to a customary adjustment based upon inventory at closing. B+G Foods expects the acquisition to be immediately accretive to its earnings per share and free cash flow.

B+G Foods projects that after the acquisition is fully integrated the acquired business will generate on an annualized basis net sales in the range of 220.0 million USD to 225.0 million USD, adjusted Ebitda in the range of 38.0 million USD to 40.0 million USD and adjusted diluted earnings per share in the range of 0.26 USD to 0.28 USD. Because the acquisition was structured as an asset purchase, B+G Foods expects to realize approximately 83.0 million USD in tax benefits on a net present value basis. At the midpoint of B+G Foods’ post-integration projected adjusted Ebitda for the business, the acquisition represents a purchase price multiple of approximately 9.4 times adjusted Ebitda (or 7.2 times adjusted Ebitda net of expected tax benefits).

B+G Foods funded the acquisition and related fees and expenses with cash on hand, including the net proceeds of its August 2016 public offering of common stock, and additional revolving loans under its existing credit facility.