Business Strategies / Industry News

Pinnacle Foods To Buy Boulder Brands for $975 Million

By Dave Fusaro, Editor in Chief

Nov 24, 2015

Pinnacle Foods Inc. said it's agreed to buy publicly held Boulder Brands Inc. for $975 million, including approximately $265 million of debt.

The acquirer said the deal will expand Pinnacle's presence in growing and complementary health and wellness categories and in the natural and organic retail channel and provide Pinnacle with a new growth platform in refrigerated foods.

The deal will end a turbulent period for Boulder Brands, headquartered in Boulder, Colo., which posted $517 million in sales in 2014 but also a loss of $127 million. And the outlook looked even gloomier for this year, as CEO Steve Hughes, who co-founded the company in 2005, resigned this past summer at the same time layoffs and lower sales projections were announced.

The company, which makes Udi's and Glutino gluten-free products, Evol natural frozen meal offerings and Smart Balance and Earth Balance spreads, said it was considering strategic options, including a sale or trimming its product portfolio.

Pinnacle, which also is public, remains majority-owned by equity firm Blackstone Group. Its brands include Birds Eye, Mrs. Paul's, Hungry-Man, Log Cabin, Lender's and Vlasic.

Recall that in May 2014, a deal was struck for Hillshire Brands to acquire Pinnacle, Parsippany, N.J., for $4.23 billion, but that deal was scotched when Tyson agreed to buy Hillshire. As a result, Pinnacle got a $163 million payment to kill the deal.

The Pinnacle-Boulder transaction is expected to be completed in the first quarter of 2016.

Pinnacle CEO Bob Gamgort said Boulder's existing headquarters location will be retained.