Dive Brief:
- B&G Foods is buying Del Monte Foods’ broth and stock business, which includes the College Inn and Kitchen Basics brands, for approximately $110 million.
- B&G said it was the winner for the broth and stock business following a “competitive auction process” that was conducted in connection with Del Monte Foods’ bankruptcy.
- The acquisition is expected to close in the first quarter following court approval and the sales of other assets by Del Monte unrelated to B&G.
Dive Insight:
The purchase of the broth and stock offerings marks a departure for B&G, which has been selling off brands to sharpen its focus and reduce debt.
During the past few years, the food conglomerate has sold two of its tomato brands, its Le Sueur vegetable and Green Giant canned businesses and its snacks line Back to Nature. The company also has been looking to sell its Green Giant frozen business.
With College Inn and Kitchen Basics, B&G is adding brands that the company said complement its existing portfolio and provide valuable pantry staples for consumers making food at home.
Inflation has forced many people to cut back on spending, prompting them to eat out less in favor of making more of their own meals at home. That shift provides a favorable tailwind for brands such as College Inn and Kitchen Basics, as well as other products B&G owns, including Crisco, Ortega and Victoria sauces.
“This acquisition is consistent with our longstanding acquisition strategy of targeting well-established brands with defensible market positions and strong cash flow at reasonable purchase price multiples,” Casey Keller, B&G’s CEO, said in a statement.
B&G Foods expects the acquisition to be immediately accretive to its earnings per share, adjusted EBITDA and free cash flow. The New Jersey company, which posted sales of nearly $2 billion during its 2024 fiscal year, estimated that College Inn and Kitchen Basics brands will generate annual net sales in the range of approximately $110 million to $120 million.
