B&G Foods Inc., Parsippany, N.J., completed its acquisition of ACH Food Companies Inc.’s spices and seasonings business for $365 million in cash. The deal, announced Nov. 21, is subject to an adjustment based upon inventory at closing. B&G and its subsidiaries manufacture, sell and distribute shelf-stable and frozen foods across the U.S., Canada and Puerto Rico. ACH supplies spices and seasonings to retail and foodservice customers.
B&G projects that after the purchase is fully integrated, the ACH business will generate on an annualized basis net sales from $220 to $225 million, with adjusted earnings before interest, taxes and amortization (EBITDA) in the range of $38.0 million to $40.0 million, and adjusted diluted earnings per share from $0.26 to $0.28.
Because the acquisition was structured as an asset purchase, B&G said it expects to realize approximately $83.0 million in tax benefits on a net present value basis. At the midpoint of B&G Foods’ post-integration projected adjusted EBITDA for the business, the acquisition represents a purchase price multiple of approximately 9.4 times adjusted EBITDA (or 7.2 times adjusted EBITDA net of expected tax benefits).
ACH's spices and seasonings business includes the Spice Islands, Tone’s and Durkee brands. Its business also includes Weber brand sauces and seasonings, sold under license. As part of the acquisition, B&G also acquired a manufacturing facility in Ankeny, Iowa.
The acquisition, fees and expenses were funded by B&G’s cash on hand, which included net proceeds from its public offering of common stock in August.
