B&G Deploys Cash Raised in Public Offering to Soak up Seasonings from ACH
B&G Foods Holdings Corp. (NYSE: BGS) has agreed to purchase the seasonings business line of ACH Food Co. Inc., a maker of spices and cooking oils, for approximately $365 million in cash. The transaction is expected to close by Q4 2016.
ACH, headquartered in Oakbrook, Illinois, sells seasonings and sauces to retail and food service customers. Among ACH’s seasonings products are: Weber brand sauces, Spice Islands extracts, and Durkee’s and Tone’s seasonings. As a part of the deal, B&G will acquire ACH’s manufacturing facility in Ankeny, Iowa.
The transaction by B&G, a seller of shelf-stable and frozen foods based in Parsippany-Troy Hills, New Jersey, “significantly broadens” the buyer’s position in the spices and seasonings category. The buyer’s brands include: Bear Creek Country Kitchens, Spring Tree, Cary’s, MacDonald’s, New York Flatbreads and more. B&G predicts that ACH will generate between $38 million and $40 million Ebitda beginning in 2017.
This deal follows a public stock offering of nearly $4.6 million of B&G shares in March 2016, providing B&G with more cash on hand to pursue additional food deals. The food manufacturer made food deals prior to the stock offering including: the acquisition of Mama Mary’s pizza for $50 million; the purchase of granola bar maker Rickland Orchards LLC for $57.5 million; and the acquisition of Green Giant and Le Sueur vegetable businesses, previously owned by General Mills, for $765 million.