B&G Foods, Inc. ( BGS )
recently announced that it will commence a public offering of
3,629,165 shares of its common stock. The packaged food company
also intends to provide the underwriters with a 30-day option to
purchase up to 544,375 additional shares of common stock.
B&G FOODS CL-A (BGS): Free Stock Analysis
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The net proceeds from the offering will be used for general
corporate expenses, which may include repayment of the company's
long-term debt and expenditures towards the acquisition of the New
York Style and Old London brands and any acquisitions that may take
place in the future.
On September 19, 2012, B&G announced the acquisition of the
New York Style and Old London brands from Chipita America, Inc. for
$62.5 million in cash. The purchase - expected to close during the
fourth quarter of 2012 - also includes manufacturing facilities in
Yadkinville, North Carolina. B&G expects to generate $45 to $50
million of revenue from this acquisition in fiscal 2013.
The proposed acquisition will strengthen the company's product
portfolio, as New York Style and Old London are already established
brands in the snacking segment. New York Style offers
traditional bakery products such as Original Bagel Crisps, Pita
Chips, Mini Bagel Crisps and Panetini Italian Toast. Old London
offers a large number of Melba products such as Melba Toasts and
Some of the proceeds from the above-mentioned common stock
offering may be used to pay for the expenses incurred in this
acquisition. A part of the proceeds may also be used for repayment
of long-term debt of the company. As of June 30, 2012, the company
had $702.1 million of long-term debt.
B&G Foods, Inc carries a Zacks #3 Rank that translates into a
short-term 'Hold' rating. Longer-term, we are maintaining our
Neutral recommendation on B&G Foods, Inc.