Pinnacle Foods agrees to buy Boulder Brands for $975m

Pinnacle Foods has signed a definitive agreement to acquire Boulder Brands for approximately $975m, which includes approximately $265m of net debt, in a move to benefit from younger consumers’ increasing appetite for gluten-free and organic foods.

Besides, the transaction provides Pinnacle with a new growth platform in refrigerated foods.

As per the terms of the agreement, Pinnacle Foods will launch a tender offer to purchase all of the outstanding shares of Boulder Brands for $11 for each share.

The deal is subject to customary closing conditions and is likely to be completed in the first quarter of 2016.

Pinnacle expects the deal to be accretive to EPS starting next year.

Based in Boulder, Colorado, US, Boulder Brands owns a range of health and wellness brands, including Udi’s and Glutino gluten-free products, EVOL natural frozen meal offerings, and Smart Balance and Earth Balance refrigerated and shelf-stable spreads businesses.

Its brands are sold in both traditional, and natural and organic channels in the US.

In 2014, the company’s annual net sales totaled over $500m.

Commenting on the deal, Pinnacle Foods CEO Bob Gamgort said, "The acquisition of Boulder Brands further expands our health and wellness portfolio, currently anchored by the Birds Eye and gardein brands.

"In addition to being a synergy-rich, accretive transaction with on-trend brands, the acquisition provides us with an important health and wellness talent pool in Boulder, Colorado. In this regard, we plan to retain Boulder’s existing headquarters location."

Boulder Brands chairman Dean Hollis said: "After a thorough review of strategic alternatives to enhance shareholder value, we are pleased to provide our shareholders with immediate and substantial cash value."

"Together with Pinnacle Foods, Boulder Brands will have additional and stronger resources to drive our brands and deliver value to customers and consumers, while providing new opportunities for employees. We expect a seamless transition and look forward to accelerating our growth across an impressive collection of health and wellness brands as part of Pinnacle Foods," Hollis continued.

Pinnacle will fund the deal with cash on hand and new debt.