— Acquisition Expected to Reduce Supply Chain Risk and Reduce Costs for Certain Green Giant® Frozen Products —
B&G Foods, Inc. (NYSE: BGS) announced that effective today it has acquired the frozen vegetable manufacturing operations of Growers Express, LLC. Growers Express is an industry innovator which manufactures, produces, packages and sells frozen vegetable products, primarily Green Giant® Riced Veggies and Green Giant Veggie Spirals®. The purchased assets include inventory, equipment, a sublease for a portion of a manufacturing facility in Yuma, Arizona, and a lease for a warehouse facility in San Luis, Arizona. Approximately 155 employees will transfer to B&G Foods.
“By increasing the variety and volume of Green Giant frozen vegetable products produced at internal manufacturing facilities, we expect to reduce inefficiencies, reduce costs and reduce supply chain risk for certain Green Giant frozen products. We also believe that this acquisition will enhance our innovation efforts for the Green Giant brand and improve our speed to market for new innovation. Growers Express has been an important partner of B&G Foods for a number of years and we thank them for their partnership,” stated Casey Keller, President and Chief Executive Officer of B&G Foods.
As part of the acquisition, B&G Foods also repurchased the master license agreement for certain Green GiantTM Fresh vegetable products and will assume responsibility for the administration of related sublicense agreements.
In a joint statement, Mark Dendle, CEO, and Kirk Wagner, COO of Growers Express stated, “We are extremely thankful for all the Team Members who developed one of the largest riced and spiralized frozen vegetable production facilities globally. Our blue-ribbon Team has collaborated with B&G Foods on product innovation and quality since 2016, benefitting from the strategic position of our facilities and delivering to the highest quality and food safety standards.”
B&G Foods funded the acquisition and related fees and expenses with cash on hand and revolving loans under its existing credit facility. The acquisition is expected to result in a slight reduction to B&G Foods’ consolidated leverage ratio1. Terms of the transaction were not disclosed.
B&G Foods’ consolidated leverage ratio is defined in the Company’s credit agreement as the ratio, determined on a pro forma basis, of the Company’s consolidated net debt, as of the last day of any period of four consecutive fiscal quarters to the Company’s adjusted EBITDA (as defined in the credit agreement) before share-based compensation for such period.
About B&G Foods, Inc.
Based in Parsippany, New Jersey, B&G Foods and its subsidiaries manufacture, sell and distribute high-quality, branded shelf-stable and frozen foods across the United States, Canada and Puerto Rico. With B&G Foods’ diverse portfolio of more than 50 brands you know and love, including Back to Nature, B&G, B&M, Bear Creek, Cream of Wheat, Crisco, Dash, Green Giant, Las Palmas, Le Sueur, Mama Mary’s, Maple Grove Farms, New York Style, Ortega, Polaner, Spice Islands and Victoria, there’s a little something for everyone. For more information about B&G Foods and its brands, please visit www.bgfoods.com.
Statements in this press release that are not statements of historical or current fact constitute “forward-looking statements.” The forward-looking statements contained in this press release include, without limitation, statements related to the expected impact of the acquisition, including its impact on the Company’s adjusted EBITDA and consolidated leverage ratio, and the Company’s ability to reduce costs, reduce supply chain risks and enhance innovation efforts and speed to market for certain of the Company’s Green Giant frozen vegetable products. Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause the actual results of B&G Foods to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements that explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms “believes,” “belief,” “expects,” “projects,” “intends,” “anticipates,” “assumes,” “could,” “should,” “estimates,” “potential,” “seek,” “predict,” “may,” “will” or “plans” and similar references to future periods to be uncertain and forward-looking. Factors that may affect actual results include, without limitation: whether and when the Company will be able to realize the expected financial results and accretive effect of the acquisition, and how customers, competitors, suppliers and employees will react to the acquisition; the continuing impact of the COVID-19 pandemic on the Company’s business, including, without limitation, the ability of the Company and its supply chain partners to continue to operate manufacturing facilities, distribution centers and other work locations without material disruption, and to procure ingredients, packaging and other raw materials when needed despite disruption in the supply chain or labor shortages, the duration of social distancing and stay-at-home and work-from-home policies and recommendations, and whether, and the extent to which, additional waves or variants of COVID-19 will affect the United States and the rest of North America, and the extent to which macroeconomic conditions resulting from the pandemic and the pace of the subsequent recovery may impact consumer eating and shopping habits; the Company’s substantial leverage; the effects of rising costs for the Company’s commodities, ingredients, packaging, other raw materials, distribution and labor; crude oil prices and their impact on distribution, packaging and energy costs; the Company’s ability to successfully implement sales price increases and cost saving measures to offset any cost increases; intense competition, changes in consumer preferences, demand for the Company’s products and local economic and market conditions; the Company’s continued ability to promote brand equity successfully, to anticipate and respond to new consumer trends, to develop new products and markets, to broaden brand portfolios in order to compete effectively with lower priced products and in markets that are consolidating at the retail and manufacturing levels and to improve productivity; the Company’s ability to recruit and retain senior management and a highly skilled and diverse workforce at the Company’s corporate offices, manufacturing facilities and other locations despite a very tight labor market and changing employee expectations as to fair compensation, an inclusive and diverse workplace, flexible working and other matters; the risks associated with the expansion of the Company’s business; the Company’s possible inability to identify new acquisitions or to integrate recent or future acquisitions or the Company’s failure to realize anticipated revenue enhancements, cost savings or other synergies from recent or future acquisitions; the Company’s ability to successfully complete the integration of recent or future acquisitions into the Company’s enterprise resource planning (ERP) system; tax reform and legislation, including the effects of the Infrastructure Investment and Jobs Act, U.S. Tax Cuts and Jobs Act and the U.S. CARES Act, and future tax reform or legislation; the Company’s ability to access the credit markets and the Company’s borrowing costs and credit ratings, which may be influenced by credit markets generally and the credit ratings of the Company’s competitors; unanticipated expenses, including, without limitation, litigation or legal settlement expenses; the effects of currency movements of the Canadian dollar and the Mexican peso as compared to the U.S. dollar; the effects of international trade disputes, tariffs, quotas, and other import or export restrictions on the Company’s international procurement, sales and operations; future impairments of the Company’s goodwill and intangible assets; the Company’s ability to protect information systems against, or effectively respond to, a cybersecurity incident or other disruption; the Company’s sustainability initiatives and changes to environmental laws and regulations; the Company’s ability to successfully transition the operations of the Portland, Maine manufacturing facility to third-party co-manufacturing facilities and existing Company manufacturing facilities without significant disruption in production or customer service, and the Company’s ability to achieve anticipated productivity improvements and cost savings; and other factors that affect the food industry generally. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in B&G Foods’ filings with the Securities and Exchange Commission, including under Item 1A, “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and in its subsequent reports on Forms 10-Q and 8‑K. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. B&G Foods undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.