PARSIPPANY, N.J. — B&G Foods, Inc. has agreed to acquire the Green Giant and Le Sueur brands of frozen and canned vegetables from General Mills, Inc. for approximately $765 million in cash, subject to an inventory adjustment at closing. B&G Foods expects the acquisition to close by the end of the year.
|Robert C. Cantwell, president and c.e.o. of B&G Foods|
“We are thrilled to welcome Green Giant and Le Sueur to the B&G Foods family of brands,” said Robert C. Cantwell, president and chief executive officer of B&G Foods. “For over 100 years, Green Giant and Le Sueur have been providing consumers with great tasting, nutritious vegetables picked at the peak of perfection. We look forward to building on that rich history by offering new and innovative products that will respond to the needs of today’s health conscious consumer.”
B&G Foods expects the acquisition to be immediately accretive to earnings per share and free cash flow. The company projects that following a 6- to 12-month transition period, the Green Giant and Le Sueur brands will generate annual net sales of $550 million, adjusted EBITDA of approximately $95 million to $100 million and earnings per share of 60c. B&G Foods expects to realize approximately $137 million in tax benefits because the acquisition will be structured as an asset purchase.
General Mills said it will continue to operate the Green Giant businesses in Europe and select export markets under license from B&G Foods.
The transaction marks B&G Foods’ entry into the frozen foods category. The company and its subsidiaries manufacture, sell and distribute such brands as Cream of Wheat, Mrs. Dash, Pirate’s Booty and Ortega.
The Green Giant and Le Sueur businesses included in the transaction generated $585 million in net sales in fiscal 2015.
Earlier this year, General Mills recorded a $260 million asset impairment charge against the Green Giant business. In a filing with the U.S. Securities and Exchange Commission on July 1, the company said the resources used to support the business will be allocated elsewhere.The sale reinforces Minneapolis-based General Mills’ strategic priority to focus its resources on the brands, categories and markets with the most promising growth potential. The company said it will use net proceeds from the acquisition for share repurchases and debt reduction. The company expects the transaction will be dilutive to fiscal 2016 earnings per share in the range of 5c to 7c, excluding transaction costs and a one-time gain on the sale.