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B&G Foods (BGS) Hits 52-Week High on Green Giant Deal

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Shares of B&G Foods, Inc.BGS touched a new 52-week high of $37.25 on Sep 8. Shares have been up about 20% since the company's announcement of a definitive agreement to acquire General Mills, Inc.'s GIS Green Giant frozen and canned vegetables business on Sep 3.

The New Jersey-based packaged food company eventually closed the trading session at $36.49, yielding a solid year-to-date return of 25.8%.

Growth Drivers

B&G Foods' acquisition of the Green Giant and Le Sueur businesses in the U.S., Canada and other markets is worth a cash transaction of approximately $765 million. It is expected to close by the end of this year, subject to regulatory approvals.

The Green Giant buyout will help B&G Foods enter the frozen food business, which according to the company, has tremendous growth potential. It expects the acquisition to be immediately accretive to earnings and free cash flow.

B&G Foods expects the Green Giant and Le Sueur brands to generate net sales of about $550 million on an annual basis, following a 6 to 12-month transition period. During the same time period, adjusted EBITDA is expected to increase by about $95 million to $100 million and earnings per share by 60 cents. In addition, B&G Foods expects $137 million in tax benefits, since the acquisition will be treated as a purchase of assets.

B&G Foods carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked consumer staples stocks include Omega Protein Corporation OME and SUPERVALU Inc. SVU . While Omega Protein Corporation sports a Zacks Rank #1 (Strong Buy), SUPERVALU holds a Zacks Rank #2 (Buy).

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GENL MILLS (GIS): Free Stock Analysis Report

B&G FOODS CL-A (BGS): Free Stock Analysis Report

OMEGA PROTEIN (OME): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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