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B&G acquires Pirate Brands in $195M cash deal

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B&G Foods Inc., a Parsippany-based maker and distributor of food products, has purchased snacks company Robert's American Gourmet Food LLC for about $195 million cash, the company announced today.

The acquisition further expands the portfolio of B&G, whose brands range from Cream of Wheat cereal to Mrs. Dash seasoning, into snack foods, many of which are targeted at children.

Robert's American Gourmet Food does business as Pirate Brands, catering to consumers of natural, baked, gluten- and trans-fat-free snacks. Much of its growth comes from aged white cheddar products, B&G CEO David Wenner said.

Wenner said the purchase price, while higher than the company's typical acquisition, reflects growth potential of Pirate Brands. B&G is projecting that Pirate Brands products will generate net annual sales of $80 million to $90 million after the companies are integrated.

“The typical business we purchase has a history of declining sales,” Wenner told analysts today in a conference call. “This business has had double-digit growth in sales for years.”

This marks the second addition to B&G's snack portfolio since it entered the category. The company purchased New York Style and Old London brands from Chipita America Inc. for $62.5 million last October.

Based in Sea Cliff, N.Y., Pirate Brands products are sold online as well as in supermarkets, pharmacies, delis and cafés.

“We're certainly buying this as something we believe we can grow well above our average growth rates,” Wenner said.

B&G expects the acquisition to close in July, pending regulatory approval and customary closing conditions. B&G purchased Pirate Brands from VMG Partners, Driven Capital Management, founder Robert Ehrlich, and other entities and individuals.

“Consistent with our acquisition strategy, we expect the acquisition to be immediately accretive to our earnings per share and free cash flow,” Wenner said.

B&G said it plans to fund the acquisition with remaining net proceeds of its recently completed senior notes offering and additional revolving credit borrowings under its credit agreement.

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