Premium Brands Holdings Corporation, a producer, marketer and distributor of branded specialty food products, announced that it has completed the following three transactions:
The acquisition of a 100% interest in Minnesota based Buddy's Kitchen Inc. from its founding family and management;
The acquisition of a 100% interest in California based Raybern Foods from TSG Consumer Partners, management and other shareholders; and
The purchase of a 50% interest in California based Shaw Bakers.
Buddy's is a manufacturer of sandwiches and other prepared meal solutions for a variety of customers with a particular focus in the airline and convenience store channels. It operates two modern production facilities in the Minneapolis area, one of which is 91,000 square feet and the other 62,000 square feet.
Raybern's is a manufacturer of branded specialty sandwiches for the US retail market and operates a modern 146,000 square foot facility in Tupelo, Mississippi. Its line of authentic handheld products includes the #1 selling Philly Cheesesteak sandwich in the US as well as a wide variety of other frozen and refrigerated sandwiches and wraps.
Shaw Bakers is a manufacturer and distributor of fresh and frozen artisan breads as well as a range of sweet and savory pastries. It operates a 67,600 square feet facility in the greater San Francisco area.
On a combined basis Buddy's, Raybern's and Shaw Bakers have annual sales of approximately $115 million (approximately CDN$147 million).
"Buddy's and Raybern's greatly complement our existing businesses as well as each other," said Mr. Steve Sposari, President of Premium Brands' North American Sandwich Group. "With Buddy's we gain a new line of unique and innovative products, a very flexible production platform with excess capacity and significantly improved access to the US convenience store and airline segments. Raybern's provides us with one of the leading premium sandwich brands in the US and will enable us to further strengthen and expand our reach in the US retail channel.
"I have admired both companies for many years and I am honored to have the opportunity to work with their respective talented management teams," added Mr. Sposari. Also, I know all three teams are very excited about working together to leverage each other's strengths, as well as Premium Brands' resources, to strengthen their respective businesses," said Mr. Sposari.
"These transactions both diversify and greatly enhance our Sandwich Platform's growth opportunities and move it significantly closer to its objective of becoming North America's leading sandwich manufacturer," said Mr. Paleologou, President and CEO of Premium Brands.
"We are very excited to be joining the Premium Brands family," said Mr. Dave Smith, President and CEO of Buddy's Kitchen Inc. "I am very confident that we are partnering with the right company and that Steve and his group, as well as Premium Brands, share our core values and our long term vision for Buddy's," added Mr. Smith.
Lazard Middle Market served as financial advisors to Buddy's.
"As a leader in the specialty food space, Premium Brands represents an ideal partner for Raybern's", said Mr. Rob Leibowitz, CEO of Raybern's. "On behalf of the entire management team, I would like to thank TSG for their collaborative partnership. We're proud of everything Raybern's has accomplished over the last few years, including expanding our innovative sandwich offerings, redesigning our packaging, diversifying and growing our customer base, and building a best-in-class manufacturing platform to enhance our operations. We look forward to building on this success as Raybern's becomes part of the Premium Brands family," added Mr. Leibowitz.
Piper Jaffray & Co. and Robert W. Baird & Co. served as financial advisors to Raybern's and Ropes & Gray LLP served as legal advisor.
"We are delighted to announce our partnership with San Francisco based Shaw Bakers and its talented founders Nicolas Bernadi and Pascal Rigo. They are two of the most innovative, progressive and driven entrepreneurs in the food industry. We look forward to working with them to build scale around their portfolio of innovative food products and help them take advantage of a variety of exciting growth opportunities in the specialty food space", said Mr. Paleologou.
The total purchase price for the combined transactions is, subject to customary closing adjustments, $156.5 million (approximately CDN$200 million), consisting of $153.0 million in cash and $3.5 million in Premium Brands common shares. The cash component of the transaction will be funded through the Company's senior revolving credit facility which was increased to $550 million from the previous $350 million.
