Bellisio Foods to acquire prepared frozen foods maker Overhill Farms

American frozen food manufacturer Bellisio Foods has entered into a definitive agreement to acquire Overhill Farms in an all-cash merger deal valued at approximately $80.9m.

Overhill Farms is a value-added supplier of custom prepared frozen foods for branded retail, private label and foodservice customers.

The company’s product portfolio includes entrées, plated meals, bulk-packed meal components, pastas, soups, sauces, poultry, meat and fish specialities, as well as organic and vegetarian offerings.

Under the terms of the deal, Overhill Farms’ shareholders will receive $5.00 in cash for each share of Overhill Farms common stock they own.

The transaction, which is subject to approval from Overhill Farms’ shareholders, regulatory approvals and other customary closing conditions, is expected to be completed during the fourth quarter of fiscal 2013.

The proposed transaction is not subject to a financing condition.

The value of the transaction represents a 26% premium over the closing price of Overhill Farms common stock on 13 August 2012, prior to the company’s announcement that it was reviewing strategic alternatives.

It also represents a 25% premium over the average of the closing price of the common stock during the 60 calendar days ended 13 May 2013, prior to entering into the merger agreement.

Overhill Farms chairman and CEO James Rudis said that following a review of potential strategic alternatives, the company’s board concluded that this all-cash transaction was the best way to maximise value for its shareholders.

"We know that our customers will continue to be well served, and that the clear synergies in this transaction will make both companies stronger," Rudis added.

Bellisio chairman and CEO Joel Conner said that Overhill’s brand portfolio and West Coast manufacturing presence will enable Bellisio to better serve existing and new customers through expanded capabilities and a broader offering.

"We look forward to working with Overhill Farms’ employees and customers as we incorporate this business into Bellisio," Conner added.

Over the past two years, Bellisio and Overhill Farms have produced and distributed frozen meals under the Boston Market brand as part of an exclusive co-manufacturing and distribution agreement.

Bellisio Foods, based in Minneapolis, Minnesota, is a leading producer of frozen entrées in the country.

The company employs approximately 1,300 people and produces over 200 frozen entrées and snacks which are sold under the Michelina’s, Boston Market and other brands as well as under private label.