Pinnacle Foods Inc. said Tuesday that it agreed to buy Boulder Brands Inc. for $682 million, a move to attract younger shoppers with its natural and organic offerings and expand into the refrigerated foods category.
Under the terms of the deal, Pinnacle will pay $11 a share for Boulder Brands, valuing the company at a 9.2% premium over Monday’s closing price. The deal includes roughly $265 million of debt, Pinnacle said.
Colorado-based Boulder Brands is the maker of brands including the gluten-free Udi’s and Glutino, in addition to Smart Balance and Earth Balance. The company’s consumer base skews younger than Pinnacle’s, Pinnacle said. Pinnacle’s brands include Wish Bone salad dressing, Duncan Hines cake mixes and Birds Eye frozen vegetables.
The deal is the latest as more traditional food companies scramble to capture growing demand for foods that are perceived to be fresher and healthier. Last month, for example, Snyder’s-Lance Inc. agreed to buy fellow snack company Diamond Foods Inc. for about $1.91 billion in an effort to bolster its natural offerings.
Last year, Boulder reported revenue of $516.6 million, up 12% from a year earlier. The company’s reported a loss of $127.1 million in its most recent year, down from a profit of $10.4 million in 2013.
Pinnacle said Tuesday that it will provide 2016 guidance, including the acquisition, when it reports fourth-quarter earnings in February. The company expects to complete the transaction in the first quarter.
By Lisa Beilfuss
Source: Wall Street Journal
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