Birds Eye Foods files $350 million i.p.o.
October 12 2009
by Eric Schroeder
ROCHESTER, N.Y. — Birds Eye Foods said in an Oct. 8 filing with the Securities and Exchange Commission that it will try to raise as much as $350 million in an initial public offering of stock.
Vestar Capital Partners holds a 55% interest in Birds Eye, a marketer, manufacturer and distributor of branded food products. Pro-Fac, a New York-based agricultural cooperative, has a 40% stake. The remaining 5% is held by Birds Eye management. The groups have agreed to use net proceeds from the sale to repay debt under the company’s current credit facility.
Frozen foods make up a little more than 69% of Birds Eye sales, while the company’s specialty food group contributes nearly 30%. The company operates three frozen food facilities and four specialty food facilities.
Birds Eye markets its products under the Birds Eye brand, which currently holds the No. 1 position in frozen vegetables with a 26.5% share and No. 2 spot in complete bagged meals with a 21.8% share, according to the S.E.C. filing.
"We believe the Birds Eye brand generated approximately $1 billion in retail sales in 2009 (including Wal-Mart), and is one of the fastest growing major brands in the U.S. frozen food industry," the company said in the filing. "Over the past several years, we have made considerable investments to strengthen our Birds Eye brand and expand our portfolio of product offerings, which has resulted in meaningful net sales growth."
Birds Eye said its consolidated net sales rose to $936 million in fiscal 2009 from $636 million in fiscal 2005 while consolidated adjusted EBITDA rose to $150 million from $88 million.
Net income in the year ended June 27, 2009, totaled $53.6 million, up from $38 million in fiscal 2008, and compared with a loss of $8.9 million in fiscal 2007.
Looking ahead, Birds Eye said it expects sales growth to continue to come from its frozen food group behind the strength of "new product introductions and line extensions, along with category growth." The company cautioned, though, that competition is expected to increase in both the frozen steamed vegetables and complete bagged meal categories.