Consumers are eating out less and cooking more at home. The trend is hurting restaurant sales while driving up interest in purveyors of frozen food. The MillerPulse restaurant index reported a 1.5 percent same-store sales decline in January 2016. Strategic buyers, including Bob Evans, B&G and Dean Foods, have been turning their attention to frozen food manufacturers.

Bob Evans Farms Inc. (Nasdaq: BOBE) said in January that it will sell its 522 full-service restaurants to Golden Gate Capital for $565 million, plus debt. The move will allow Bob Evans to focus on its BEF Foods packaged foods business, which makes breakfast sausages and macaroni and cheese under the Bob Evans and Owens brands.

“Anything in the convenience area along the outer portion of the grocery stores, that’s where we’re seeing growth as an industry,” Bob Evans Farms president Mike Townsley told analysts. “And so absolutely, as we evaluate options going forward, that’ll be where our focus is.”

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To help ramp up BEF’s growth, New Albany, Ohio-based Bob Evans said it will purchase Pineland Farms Potato Co. for up to $140 million. Pineland Farms, located in Mars Hill, Maine, produces packaged mashed potatoes, diced potatoes and various cheeses that are sold to restaurants and retailers. Pineland and Bob Evans have had a business relationship since 2002.

Other strategic buyers have made frozen food deals as well. In 2016, Dean Foods Co. (NYSE: DF) acquired Friendly’s Ice Cream LLC’s retail ice cream business for $155 million in cash. The sale did not include Friendly’s restaurants, which are still backed by Sun Capital Partners Inc. The purchase boosted Dean’s ice cream division that owns the Mayfield and Dean's Country Fresh brands.

In 2015, B&G Foods Inc. (NYSE: BGS) bought the Green Giant frozen and canned vegetables brand from General Mills Inc. (NYSE; GIS) for $765 million. In that same year, B&G acquired packaged pizza crust maker Mama Mary’s for $50 million from Linsalata Capital Partners.

Consumers will always go grocery shopping, which will leave buyers hungry for packaged food producers.

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Demitri Diakantonis

Demitri Diakantonis

Demitri Diakantonis serves as Assistant Managing Editor. He joined Mergers & Acquisitions in 2015 as a Senior Reporter.