- Bob Evans is selling its restaurant business, according to Seeking Alpha. Golden Gate Capital will acquire the restaurants for $565 million plus the assumption of some net working capital liabilities. The sale is expected to close by April 28.
- A refocused Bob Evans is set to buy Pineland Farms Potato Company for $115 million, with the acquisition to be funded by fresh borrowing.
- Shares of the company are currently halted for trading.
The decision by Bob Evans Farms Inc. to sell off its restaurant chain business, separating it from its packaged food business, has been a long time coming.
Malcolm Knapp, founder of Knapp-Track and adviser to the food service industry, said that this move had always been the plan when activist investor Tom Sandell and Sandell Asset Management Group took control of Bob Evans.
“His theory is that the food company has a higher multiple than the restaurant,” Knapp told Food Dive. “And the food company has done fairly well. It has a good position, it has respected products and it was restored and revamped under (former CEO) Steven Davis, who knew that business and he built it up, streamlined the plant and expanded the penetration of the product lines."
The activist fund has said for more than a year that BEF Foods has a valuation as a standalone business that could approach as much as $1.2 billion, even as the combined restaurant and packaged foods business enjoyed a market capitalization of $946 million.
Bob Evans' plan to acquire Pineland Farms Potato is a smart move, Knapp said, as the company’s ready-to-eat mashed potatoes are its most profitable product.