Speculating in Takeover Targets Message Board

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Strategies & Market Trends : Speculating in Takeover Targets

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richardred

To: richardred who wrote (5219)	5/16/2019 1:02:45 PM
From: E_K_S	1 Recommendation Read Replies (3) of 7120

Looks like a good fit for both companies. These are hard to come by maybe 1 in 50. The only problem in this aqusition is the purchase only represents maybe 6% of the market cap so no a big mover to the overall market cap. BGS needs a few more of these Buys and something that complements their spice & baking lines. Maybe Tea or coffee but that is a bit out of their expanded service footprint. Non-GMO Ag products, specialty grains/flour would be a good fit. Maybe Redmill wants to sell at a reasonable price. Saw a Podcast on the original owner operator of RedMill (he is now in late 80's or 90's) still a 'hippy' at heart. Was doing non-GMO grains well before it was popular. They key for grains/beans and other specialty food crops is having the local processing and market to move & distribute product and have the local farmers/growers (under contract) to grow you specialty crops. UNFI is another new 'healthy' food distributor I own. Still building position and will be at same size as BGS eventually. UNFI supplies these types of local farm to store items to Whole Foods (30% of their revenues) and several other stores (Sprouts). UNFI has developed these local relationships (an expensive undertaking) and recently purchased the warehouse/Distribution center from Super Value (SUV) located in Mn. If/when BGS moves deeper into these health Ag processed foods, UNFI would be an excellent partner/distributor and it would not surprise me that they merge (possible years down the road)/ A lot depends on which way BGS moves to expand their service/food footprint. Do they want to become a manufacturer, distributor, value added producer, a specialty brand provider. I will continue to listen to BGS management looking at how they want to build/expand the company. Lots of opportunity in this space. Selling a premium product will allow higher margins and eventually the marker will price in PE expansion. BGS at 12 PE could evenutal see 16PE like GIS or even 27PE like THS. EKS

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