Packaged food company
B&G Foods Inc.
) recently acquired Rickland Orchards LLC from Natural Instincts
LLC - one of the sought-after makers of Greek yogurt-coated
granola bars and bites for $57.5 million. Of the total purchase
consideration, about $37.4 million was paid in cash and about
$20.1 million was paid in shares of common stock of B&G
Launched in Mar 2012, the Rickland Orchards brand has already
generated annualized net sales of more than $50.0 million. We
believe its considerable presence in the club, retail, mass and
convenience channels and exposure to healthier product portfolio
such as Greek yogurt set the brand apart and made it a lucrative
We view the deal as strategically positive for both parties as
they operate in the same vertical. Post acquisition, the founder
and CEO of Rickland Orchards has joined B&G Foods as
executive vice president of the Club Channel. Rickland Orchards
COO assumed the position of vice president of Product Innovation
at B&G Foods. Rickland Orchards is likely to benefit from
B&G Foods' larger scale of operation.
On the other hand, this acquisition will open up opportunities
for B&G Foods in the protein-packed snacks category. B&G
Foods is all set to beef up its snack offerings inorganically as
evident from its three acquisitions in the last one year,
including Pirate Brands from Robert's American Gourmet Food,
TrueNorth from DeMet's Candy Company and New York Style and Old
London from Chipita America.
Although all these acquired brands are typically smaller parts of
larger companies, all of them have a distinctive competitive
advantage, strong margins and generate near about $100 million in
B&G Foods - a Zacks Rank #3 (Hold) company -- is not the only
food company looking to expand inorganically. In the recent past,
sell-offs and acquisitions have gained momentum in the
foodservice industry. Last month, meat-oriented food solutions
The Hillshire Brands Co.
) inked a definitive agreement to acquire Calif.-based Golden
Island - one of the sought-after manufacturers of premium gourmet
J. M. Smucker Co.
) acquisition of organic and gluten-free ancient grain products
maker Enray Inc. in August is also worth mentioning. Another
company in the same sector,
Flowers Foods Inc.
) carried on its acquisition spree with the takeover of 20
Hostess Bakeries and 5 Bread Brands in July this year.
B&G FOODS CL-A (BGS): Free Stock Analysis
FLOWERS FOODS (FLO): Free Stock Analysis
HILLSHIRE BRAND (HSH): Free Stock Analysis
SMUCKER JM (SJM): Free Stock Analysis Report
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