B&G Foods to acquire two snack brands from Chipita America

US-based B&G Foods has entered into an agreement to acquire New York Style and Old London snack brands from Chipita America for approximately $62.5m in cash.

The acquisition will include a manufacturing facility at Yadkinville, North Carolina, which employs about 250 people.

B&G Foods president and chief executive officer David L Wenner said the acquisition will mark the company’s first foray into the fast growing snack category.

"Consistent with our prior acquisitions, we expect this acquisition to be immediately accretive to our earnings per share and free cash flow," Wenner added.

B&G Foods expects the brands to generate EBITDA of approximately $8m to $9m and net sales of approximately $45m to $50m in 2013.

The acquisition, which is subject to the satisfaction of customary closing conditions, is expected to be completed during the fourth quarter of 2012.

The New York Style brand offers products such as bagel crisps, mini bagel crisps, Pita chips and Panetini Italian toast, which have been developed to reflect the taste of New York City’s traditional bakeries.

The Old London brand offers Melba toasts and snacks, bagel chips, as well as speciality snacks under the Devonsheer and JJ Flats names.

This deal will be B&G Foods’ second major acquisition in recent years – in November 2011, it acquired the Culver Specialty Brands division, which produces seasoning blends, sugar substitutes, flavoured sprinkles, and anti-static sprays, from Unilever in a $325m deal.

For the second quarter ended 30 June 2012, B&G Foods reported a 14.8% increase in net sales to $148.6m and a 27.2% surge in net income to $16m, helped by the acquisition of the Culver Specialty Brands division and higher pricing actions.

B&G Foods manufactures a range of shelf-stable foods across the US, Canada and Puerto Rico, while Chipita America, a subsidiary of Greece-based Chipita, produces bakery and confectionery products.