B&G Foods, Inc. (NYSE:BGS) and Pinnacle Foods Inc (NYSE:PF) are set to bid against one another for the Wish-Bone salad dressing brand from Unilever N.V. (ADR) (NYSE:UN). The expected price is to be $400 million to $500 million. Both B&G and Pinnacle are looking to add to their food brands, while Unilever is looking to divest non-core assets and focus on its personal-care business. A sale of Wish-Bone for Unilever would follow up the $700 million sale of Skippy peanut butter to Hormel Foods.
The little food company that keeps growing
B&G Foods, Inc. (NYSE:BGS) is showing no signs of slowing down in the acquisition department. A buy of Wish-Bone would follow up its purchase earlier this month of Robert’s American Gourmet Foods for $195 million in cash. Last month B&G purchased the TrueNorth brand from DeMet’s Candy Company. These acquisitions add to B&G’s portfolio, which already consists of such well-known brands Ortega Salsa, Mrs. Dash, Grandma’s Molasses, Emeril’s and Cream of Wheat.
For the first quarter of this year, net sales increased 8.8% to $171.2 million. Two brands that were acquired at the end of last year, New York Style and Old London, contributed $11.3 million in net sales. Overall gross profit increased 3.5% to $58.8 million.
The growth going forward for B&G Foods, Inc. (NYSE:BGS) is going to come from its recent acquisitions and any new acquisitions the company makes over the coming quarters. The company’s overall strategy with a new acquisition is for it to be immediately accretive to earnings per share and cash flow. In terms of the recent acquisition of Robert’s American Gourmet Foods that will likely close next month, the early estimate for annual sales is $80 million to $90 million. The deal is also expected to add $18 million to $20 million in adjusted EBITDA.
What I like about B&G Foods, Inc. (NYSE:BGS) is that the stock offers both growth and income. The dividend has been steadily increasing and the yield is now 3.6%. The dividend payout ratio is 91%, so it’s obvious that B&G is a very shareholder-friendly company with such a high payout.
This food company just popped up on the radar
Pinnacle Foods Inc (NYSE:PF)just came public in the first quarter of this year by The Blackstone Group. The company has a great collection of brands which include Duncan Hines, Aunt Jemima, Bird’s Eye, Vlasic, and Mrs. Paul’s. The company’s stated goals are to reinvigorate iconic brands. According to the company, 85% of its products are in American households. The company maintains a top-four market position in the 12 main categories in which it operates.