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B&G Foods Inc. Message Board

  • captainwho2 captainwho2 Sep 21, 2012 10:00 AM Flag

    Here's the new acquisition we've been waiting for!!!

    B&G Foods, Inc. (NYSE:BGS) will purchase the New York Style and Old London brands from Chipita America, Inc. in a cash transaction worth about $62.5 million. The acquisition includes a state-of-the-art manufacturing facility in Yadkinville, North Carolina, with around 250 employees. The buyer believes that the brands will bring net sales of between $45 million and $50 million, and earnings before interest, depreciation, taxes and amortization of about $8 million to 9 million in 2013.

    If the 2013 Est. Rev was 663.52M, this should give us +6.8 - 7.5% boost to 2013 Revenue.

    Goin' higher!

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    • New York Style, the maker of Bagel Crisps, was brought to life in a small cheese shop when the owners decided to serve their gourmet cheese samples on toasted bagel slices. Old London was founded in 1932 as Devonsheer Melba Company. Eventually, Devonsheer Melba became part of the Old London brand name, which offers a larger array of Melba products.
      B&G president and CEO David Wenner commented, "The addition of these brands marks our entry into the fast growing snack category. Consistent with our prior acquisitions, we expect this acquisition to be immediately accretive to our earnings per share and free cash flow."
      B&G said it expects the acquisition to close during the fourth quarter of 2012, subject to the satisfaction of customary closing conditions.

    • If you spend some time to walk around your local grocery or convenient store, you will notice there are quite a few target firms with small niche products that always have shelf space and sell for a relative high price. These "one-off" brands abound in the food stores throughout the USA.

      If this is an "all cash" deal with no added financing, that's good for the balance sheet but maybe we
      don't get the large increase in the dividend, which is the reason many investors buy the stock. A cash deal to me is very good. A bigger dividend would be nice, but maintaining a stable debt to equity ratio will support the share price on wall street going forward.

      Going in to the realm of snack foods is somewhat of a new area for compared to maple
      syrup and food spices. I feel there is a lot more competition for the consumer dollar in the world
      of snacks n chips. I hope Wenner can prove his firm can successfully compete in this new segment
      and remain FCF accretive. I fear in the back of my mind, that BGS could follow Diamond Foods
      down the path to over aggressive expansion, outside its area of expertise, resulting in a major mishap. However if Wenner can again prove his superior management skills in the snacks and chips food segment, this opens a large and lucrative area for future BGS revenues and FCF.

      Long since $ 7.86 per share entry.

      Sentiment: Hold

      • 1 Reply to jackmaster20
      • I think Wenner knows what he's doing. Bagle chips aren't exactly proliferating the market and therefore represent a bit of a niche market. I'm putting my faith in him until it is no longer warranted. You have a cost average of $7.68 in this stock, or was that your initial entry? If that's your cost avg you have been so skeptical all the way up that you never added to your position I guess.

        A caller last night asked Cramer about Flower Foods vs. B&G Foods. Cramer said go with B&G. I want you to have BGS in your portfolio on a dip. I think the fact that he didn't mention the upcoming acquisition means he's saving that for a CEO appearance show, which will probably be very soon and lately those have been buy opps.

48.50+0.90(+1.89%)Oct 21 4:02 PMEDT