| To: richardred who wrote (4466) | 5/10/2019 9:49:40 AM | | From: richardred | | | | Constellation Brands to divest wine and spirits brands for $1.7bn
Constellation Brands agreed to sell nearly 30 brands from its wine and spirits portfolio to E&J Gallo Winery for $1.7bn to accelerate growth and increase shareholder value.
The transaction includes six winemaking facilities in California, Washington and New York.
Subject to regulatory approval, the transaction is expected to close by the end of Q1 2020.
drinks-insight-network.com
Boston Beer Company and Dogfish Head Agree to Merge in $300 Million Deal
Justin Kendall and Chris Furnari May. 9, 2019 at 4:30 PM
Boston Beer Company and Dogfish Head Agree to Merge in $300 Million Deal
Eight years ago, Dogfish Head and Boston Beer Company teamed up to brew a collaboration beer for the annual SAVOR craft beer and food pairing experience.
Today, the two companies announced the signing of a definitive merger agreement valued at about $300 million.
The deal is expected to close in the second quarter.
As part of the transaction, Dogfish Head co-founders Sam and Mariah Calagione will receive about 406,000 shares of Boston Beer stock (NYSE: SAM), valued at $314.60 per share, making them the largest non-institutional shareholders in the company, behind Boston Beer founder Jim Koch.
Meanwhile, existing Dogfish Head shareholders will receive $173 million in cash, and Sam Calagione will obtain a seat on Boston Beer’s board of directors starting in 2020.
The merger comes nearly four years after Dogfish Head sold a 15 percent stake to LNK Partners, a New York-based private equity firm.
As a result of the merger, LNK will exit its investment in the Delaware-based craft brewery.
According to a press release, Boston Beer expects to fund the cash component of the transaction through a combination of cash on hand and its available credit line.
The merger brings together the Brewers Association’s second-largest craft beer maker, Boston Beer, with the 13th largest craft brewery, Dogfish Head. Both companies will retain their status as BA-defined independent craft breweries.
Speaking to Brewbound, Sam Calagione said the deal came together over pints this past February, during Beer Advocate’s Extreme Beer Fest in Boston.
“We talked about how challenging the industry is getting, the indie craft definition, brands that consumers think are indie craft, active lifestyle beers, and we discovered how beautifully complementary and not competitive our portfolios were,” he said.
In a press release, the two companies said the merger would “create a powerful Amercian-owned platform for craft beer and beyond.”
“This combination is the right fit as both Boston Beer and Dogfish Head have a passion for brewing and innovation, we share the same values and we will learn a lot from each other as we continue to invest in the high-end beer category,” Koch said, via the press release.
According to the release, Dogfish Head is on pace to sell 300,000 barrels of beer in 2019, with net sales of about $120 million.
Boston Beer chief executive Dave Burwick, who previously served as the CEO of Peet’s Coffee & Tea Inc. before taking over as CEO of the brewery last February, will lead the merged entity.
Meanwhile, George Pastrana will continue to serve as chief operating officer and president of Dogfish Head.
According to Calagione, Burwick — who led the acquisitions of two super-premium coffee brands, Intelligentsia and Stumptown, while at Peet’s — was “very involved” in the merger.
“United, we will have the highest quality, most distinct, high-end portfolio, from both a price-point and product perspective with the top-ranked sales organization to bring it to market,” Burwick said, via the release. “We expect that we’ll see more consolidation in the craft industry over time, and we’ll be in the best position to take advantage of those changes.”
Calagione, who noted that Dogfish shares about half of its wholesalers with Boston Beer, said the two companies would also look to “align distribution geography everywhere it makes sense.”
“Both of our companies sell 99 percent of what we make through the three-tier system,” he said. “It is a challenging moment where beer is not growing to the degree that all three tiers wish it was, and we can be great advocates to help bring beer back to growth in America.”
The two companies also do not plan on reducing their respective sales forces as a result of the merger.
“It’s going to work beautifully,” Calagione said, noting that Dogfish Head’s sales team is about 25 percent the size of Boston Beer’s.
Boston Beer also noted that it will consolidate Dogfish Head’s financial results into its earnings late in the second quarter. The company anticipates the transaction being “neutral to slightly accretive in 2019” and won’t have a material impact on its fully-year 2019 earnings per diluted share.
Prior to the announcement of the proposed merger, Boston Beer stock closed Thursday at $332.94, down 0.69 percent.
The Boston Beer Company and Dogfish Head Brewery to Merge, Creating the Most Dynamic American-Owned Platform for Craft Beer and Beyond
Cash and Stock Transaction, Valued at Approximately $300 Million, Combines Two Award-Winning Craft Beer Pioneers with Unrivaled Brewing Expertise and Portfolios of Leading Beer and “Beyond Beer” Brands
BOSTON, MA, May 9, 2019 – The Boston Beer Company, Inc (NYSE: SAM) and Dogfish Head Brewery today announced that the companies have signed a definitive merger agreement, bringing together two pioneering independent Craft breweries and two illustrious founders and brewers, Jim Koch and Sam Calagione.
Together, Boston Beer and Dogfish Head will create a powerful American-owned platform for craft beer and beyond. The new entity will possess more than half a century of Craft brewing expertise, a balanced portfolio of leading beer and “beyond beer” brands at high end price points, and industry leadership in innovation and quality. Following the transaction, the combined company will have a leading position in the high end of the U.S. beer market, bringing together Boston Beer’s craft beer portfolio and top-ranked sales team with Dogfish Head’s award-winning portfolio of IPA and session sour brands.
The combined company will maintain its status as an independent Craft brewery, as defined by the Brewers Association. It will be better positioned to compete against the global beer conglomerates within the craft beer category that are 50- and 100-times its size, as well as other craft brewers, while still representing less than 2% of beer sold in the United States.
Most importantly, this combination brings together two of the leading founder-brewers in the United States, Jim Koch of Boston Beer and Sam Calagione of Dogfish Head, both of whom will continue to lead brewing innovation for the newly-combined company. Sam and Mariah Calagione, Dogfish Head’s two co-founders, have elected to take substantially all of their merger consideration in the form of SAM stock and will collectively become the largest non-institutional shareholders after Jim Koch following the close of the transaction. Sam Calagione will join Boston Beer’s board of directors and Dogfish Head’s band of off-centered co-workers will join the Boston Beer team and continue to be heavily involved in beer and “beyond-beer” projects, as the companies expand opportunities for future innovation.
“We believe we are creating the most dynamic and diverse American-owned platform for craft beer and beyond,” said Jim Koch, founder and Chairman of The Boston Beer Company. “Dogfish Head has a proud history as a craft beer pioneer with a brand that is beloved by American consumers and highly respected by the industry. Sam and I have stood shoulder to shoulder in some of the defining efforts in Craft brewing including the creation of the Brewers Association, the craft beer definition, the craft brewer seal and the creation of the SAVOR food and beer event. This combination is the right fit as both Boston Beer and Dogfish Head have a passion for brewing and innovation, we share the same values and we will learn a lot from each other as we continue to invest in the high-end beer category. I am very happy that Sam will join the Board of Directors at Boston Beer. He is a tremendous friend, innovator and brewer, and I could not be more excited to work together with him for many years to come.”
“Not only are Dogfish Head and Boston Beer two original American breweries, but Jim Koch and I worked hard with other leading craft brewery founders and the Brewers Association to develop and champion what defines independent American brewers,” said Sam Calagione, founder and brewer of Dogfish Head. “This merger better positions Dogfish Head and our co-workers to continue growing within this definition for many years to come. In fact, Mariah and I believe so much in the future of our merged companies that we are all in, and personally we’re reinvesting nearly all of the proceeds back into the combined entity. We’re also proud to announce that we intend to devote a percentage of the Boston Beer stock that we receive to establishing a foundation and funding various local charitable programs.”
The combined company will be led by Boston Beer CEO, Dave Burwick. “This is a formidable combination of brands, incredible brewing talent, and leaders who remain 100 percent focused and committed to the long-term health of our breweries and growing the beer industry. United, we will have the highest quality, most distinct, high-end portfolio, from both a price-point and product perspective with the top-ranked sales organization to bring it to market. We expect that we’ll see more consolidation in the Craft industry over time, and we’ll be in the best position to take advantage of those changes.”
Boston Beer is recognized for helping launch the craft beer industry after opening its doors and brewing the first batch of Samuel Adams Boston Lager in 1984. From the launch of craft brewing to 2019 Sam Adams continues to be the most award-winning craft brewer in the world. In addition to its iconic Sam Adams beer, the company now offers nationally other leading brands such as Angry Orchard hard cider, Truly Hard Seltzer and Twisted Tea. Founded 23 years ago, Delaware-based Dogfish Head’s family of beers includes the continually-hopped 60, 90, and 120 Minute IPAs, and robust sour beer program led by SeaQuench Ale. Dogfish Head is recognized as an early leader in bringing culinary innovations to the U.S. craft beer scene, and Sam Calagione was named ‘Outstanding Wine, Spirits, or Beer Professional’ by the prestigious James Beard Foundation. Following the opening of their brewery and tasting room, Dogfish Head also established one of the first Craft distilleries in America, Dogfish Head Brewings & Eats brew pub, Chesapeake & Maine restaurant, and the Dogfish Head Inn. The newly combined company will maintain a significant presence in Delaware.
Terms of the Transaction and Impact on the Boston Beer Company’s 2019 Financial Outlook
The transaction is expected to close late in the second quarter of 2019, subject to customary closing conditions. Sam Calagione and his family will receive approximately 406,000 shares of Boston Beer stock based on a share price of $314.60. Dogfish Head shareholders will also receive $173 million in cash, most all of which is for the benefit of Dogfish Head’s financial investors, with the exception of certain transaction-related expenses.
Boston Beer expects that its current cash on hand and available line of credit will be more than sufficient to fund the cash component of the transaction. It is expected that Sam Calagione will join Boston Beer’s Board of Directors beginning in 2020. A copy of the definitive transaction agreements will be filed with the Securities and Exchange Commission (SEC).
Dogfish Head is on pace to sell nearly 300 thousand barrels for the full year 2019, which would represent high single digit growth versus the prior full year. Net sales for the full year 2019 are expected to be between $110 and $120 million. Dogfish Head employs approximately 400 employees, produces most of its beer at its brewery in Milton, DE, and sells its beer in more than 40 states. Boston Beer plans to consolidate Dogfish Head results into Boston Beer’s financial results beginning late in the second quarter of 2019 and Boston Beer currently estimates that the transaction will be neutral to slightly accretive in 2019 and will not have a material impact on full-year 2019 earnings per diluted share.
brewbound.com |
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| From: E_K_S | 5/10/2019 10:10:06 AM | | | | | | Kraft Heinz shops Plasmon
May 9, 2019 12:22 PM ET|About: The Kraft Heinz Company (KHC)|By: Clark Schultz, SA News Editor
Kraft Heinz ( KHC -0.9%) hired JPMorgan to advise the company on the potential sale of baby food brand Plasmon, according to Reuters.
Sources say preliminary bids from PE firms and food groups on Plasmon are due in by the end of next week.
A deal for Plasmon is seen fetching around $783M.
---------------------------------------------------
I expect more sales of food/Ag units in entire sector. BGS is shopping but needs to be selective
EKS |
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| To: E_K_S who wrote (5205) | 5/10/2019 10:43:12 AM | | From: richardred | | | | >I expect more sales of food/Ag units in entire sector. BGS is shopping but needs to be selective
I agree the food landscape has changed. Especially when I see old line companies, paying up to buy a pet food business
Especially if a acquisition candidate has scale. IMO although at a premium, niche ones such as McCann’s Irish Oatmeal fill complementary brands and don't break the bank. Not that it would have fit BGS. Campbell's just sold Bolthouse off to the original owner for about a third what CPB originally paid. The new owners have a much better chance at making the operation profitable now. Perhaps Campbell's Garden fresh unit, which is on the block might fit?
RE-Plasmon
>Private equity firms and food groups are looking at the business, both sources said, adding it could be worth about 700 million euros ($783 million).
>Its annual revenue is more 200 million euros and core earnings are around 50 million euros.
reuters.com
On Edit-update
Campbell Soup is getting rid of its Campbell Fresh business and it's selling its Garden Fresh Gourmet salsa brand to a Canadian company.
bizjournals.com |
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| From: richardred | 5/13/2019 10:44:45 AM | | | | | | Digital supply chain company Amber Road to be acquired by rival E2open in $425 million deal
09:42 13 May 2019
The move combines Amber’s Road’s cloud-based global trade management platform with E2open’s trading portfolio
The all-cash $425 million deal is worth $13.05 per share, a 26% premium over its Friday close
Amber Road Inc ( NYSE:AMBR) stock soared Monday after the digital supply chain company reached a deal to be acquired by competitor E2open.
The all-cash $425 million deal is worth $13.05 per share, a 26% premium over its Friday close.
Shares jumped nearly 26% to $12.97 in pre-market trading Monday.
READ: Global Blockchain Mining announces pricing details for MeVu token offering The move combines Amber’s Road’s cloud-based global trade management platform with E2open’s trading portfolio. The platform is fueled by Global Knowledge, a database of trade rules and regulations in 170 countries.
“The combination of E2open’s supply chain and logistics technologies with Amber Road’s global trade management platform will also allow customers to more fully digitize their operations and better compete in global markets,” CEO James Preuninger said.
Amber Road helps companies around the world maximize the value of their supply chains with its trade management software.
Upon completion of the deal, the company will become privately held.
proactiveinvestors.com |
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| To: richardred who wrote (5167) | 5/14/2019 7:44:59 AM | | From: richardred | | | | RE-SFS Speculation-- Some interesting reading in TO offer
>On April 16, 2019, Ares Corporate Opportunities Fund III, L.P. and Ares Corporate Opportunities Fund IV, L.P., two stockholders of Smart & Final (collectively, the "Ares Stockholders"), entered into a Tender and Support Agreement with Smart & Final (as to Section 10(k) only), Parent and the Offeror (as it may be amended from time to time, the "Support Agreement"), pursuant to which the Ares Stockholders agreed to tender all Shares now held or hereafter acquired by them in the Offer, subject to the terms and conditions set forth in the Support Agreement. As of May 10, 2019, the Ares Stockholders held approximately 58% of the Shares then outstanding. The Support Agreement is filed as Exhibit (d)(7) to the Schedule TO filed by the Offeror on May 14, 2019. There is no financing condition to the Offer. The Offer is conditioned upon, among other things:
>Are appraisal rights available in either the Offer or the Merger? No appraisal rights will be available to you in connection with the Offer. However, if we accept Shares in the Offer and the Merger is completed, stockholders will be entitled to appraisal rights in connection with the Merger with respect to Shares not tendered in the Offer if such stockholders properly perfect and do not otherwise lose their right to seek appraisal under the DGCL. See Section 16—"Appraisal Rights."
Background of the Offer; Contacts with Smart & Final
Background of the Offer
The following is a description of significant contacts between representatives of Management IX, Parent and the Offeror, on the one hand, and representatives of Smart & Final, on the other hand, that resulted in the execution of the Merger Agreement and commencement of the Offer. The discussion below covers only the key events and does not attempt to describe every communication among the parties. For a review of Smart & Final's activities relating to the contacts leading to the Merger Agreement, please refer to the Schedule 14D-9, which will be filed with the SEC and is being mailed to its stockholders with this Offer to Purchase.
Funds managed by affiliates of Apollo Global Management, LLC (together with its consolidated subsidiaries, "Apollo") previously owned Smart & Final from 2007 to 2012 before Smart & Final's sale to the Ares Stockholders in November 2012. Following Smart & Final's initial public offering in 2014, the Ares Stockholders continued to own a controlling interest in Smart & Final and, as of the close of business on May 10, 2019, the Ares Stockholders collectively owned 44,218,762 Shares of the total 76,489,536 Shares that were issued and outstanding as of such date (representing approximately 58% of the outstanding Shares).
In December 2017, representatives of affiliates of Apollo requested an informal meeting with David G. Hirz, a member of the Smart & Final Board and Chief Executive Officer of Smart & Final ("CEO"), which took place on December 17, 2017. At such meeting, affiliates of Apollo expressed their interest in an investment in Smart & Final by funds managed by affiliates of Apollo, citing their view that the public markets were not appreciating Smart & Final's value (as reflected by Smart & Final's trading price at such time). On January 8, 2018, representatives of affiliates of Apollo made a proposal to Mr. Hirz for a $400 million investment in Smart & Final by funds managed by affiliates of Apollo in the form of a convertible preferred equity investment. This $400 million investment would be used by Smart & Final to (i) make an offer to purchase $200 million of outstanding Shares to all Smart & Final stockholders for $9.00 per Share, with a backstop from the Ares Stockholders to sell shares for any Shares that were not tendered by the public stockholders, and (ii) $200 million utilized by Smart & Final to repay existing debt. Mr. Hirz reviewed such proposal at a scheduled Smart & Final Board meeting on February 7, 2018. Following a discussion, the Smart & Final Board determined to reject such proposal, citing its view that the proposal undervalued Smart & Final and was overly reflective of the negative impact that the announcement of Amazon's acquisition of Whole Foods had on Smart & Final's trading price at the time. It was also noted that the Ares Stockholders had indicated that they were not interested in selling their Shares as contemplated by the proposal from the affiliates of Apollo. Later that week Mr. Hirz responded to affiliates of Apollo sharing the foregoing determination.
On October 23, 2018, Andrew Jhawar, senior partner of Management IX, was contacted on behalf of Smart & Final by representatives of Jefferies LLC ("Jefferies") and Citigroup Global Markets Inc. ("Citi"), Smart & Final's financial advisors, to invite Management IX to participate in Smart & Final's strategic review process. Following this conversation, Management IX received Smart & Final's form of non-disclosure agreement relating to the potential acquisition of all of Smart & Final or one or more of its business lines.
On November 8, 2018, Smart & Final and Management IX entered into a confidentiality agreement. Management IX was granted access to confidential information of Smart & Final, including subsequently through its virtual data room. The confidentiality agreement contained customary standstill provisions and prohibited Management IX from (i) having discussions with any potential co-bidders in connection with a potential acquisition of Smart & Final, (ii) contacting any potential sources of debt or equity financing for a potential acquisition of Smart & Final (including with respect to an equity rollover) or (iii) entering into any exclusive financing arrangements, in each case without the prior authorization of Smart & Final.
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On November 26, 2018, Management IX attended an in-person "fireside chat" meeting with Smart & Final, and was presented with an overview of the financial projections of Smart & Final for the five-year period from fiscal years 2019 through 2023 (the "Five Year Plan") and other publicly disclosed information about Smart & Final.
On November 30, 2018, Management IX received Smart & Final's bid process letter from representatives of Jefferies and Citi containing instructions and procedures for submitting a proposal and requesting that Management IX submit a non-binding preliminary proposal, including an indicative price, by December 20, 2018.
On December 15, 2018, Management IX received additional data and information from Smart & Final's Five Year Plan to further assist Management IX with its assessment of Smart & Final and Smart & Final's business prior to submitting a preliminary proposal.
On December 20, 2018, in response to Smart & Final's request for bid submissions, Management IX submitted a non-binding preliminary proposal to acquire all of the outstanding Shares of Smart & Final for a purchase price range of $7.00-8.00 per Share. In its proposal, Management IX reserved the right to increase or decrease its purchase price range depending on the outcome of future due diligence, including, among other items, confirmation of the financial results and the achievability of Smart & Final's financial and operating projections provided to Management IX earlier that month.
On January 17, 2019, Management IX met with Smart & Final's management to attend a management presentation.
On February 22, 2019, Management IX received a draft merger agreement from Smart & Final, prepared by Proskauer Rose LLP ("Proskauer"), Smart & Final's legal counsel, via Smart & Final's virtual data room.
On February 25, 2019, Management IX met with Smart & Final's management and other representatives for a business due diligence follow-up meeting.
On March 1, 2019, Management IX was invited to participate in the next round of Smart & Final's strategic review process and received the final round process letter that requested Management IX to submit a revised proposal by March 15, 2019.
On March 15, 2019, Management IX submitted a proposal letter detailing a non-binding proposal to acquire 100% of the fully diluted equity interests of Smart & Final at a purchase price of $6.50 per Share in cash. Management IX noted in its letter that the $6.50 per Share purchase price represented an approximately 30% premium to Smart & Final's closing share price as of March 15, 2019. By the terms of the letter, this purchase price was conditioned on Smart & Final executing a 15-day exclusivity agreement by the evening of March 17, 2019. After that time, the terms of the letter dictated that the price per Share offered by Management IX would decline by $0.25 per day. That day, Management IX submitted to Smart & Final its revisions to Smart & Final's draft merger agreement.
On the evening of March 17, 2019, Management IX advised Jefferies and Citi that Management IX's bid had declined from $6.50 per Share to $6.25 per Share per the terms of its proposal letter in which it indicated that its price per Share would decline by $0.25 per day if exclusivity were not granted by such day.
On March 18, 2019, Management IX engaged in further negotiations with representatives of Smart & Final, Jefferies and Citi via conference call, as a result of which Management IX, as an inducement to obtain exclusivity, increased its proposed purchase price to $6.60 and then to $6.75 per Share, subject to Smart & Final granting Management IX a period of exclusivity and completion of confirmatory and customary due diligence. On March 19, 2019, Management IX signed the First Exclusivity Agreement with Smart & Final with an expiration time of 11:59 p.m. New York City time
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on April 3, 2019. Confirmatory due diligence began promptly and Management IX's advisors were permitted access to Smart & Final's virtual data room.
On March 23, 2019, Management IX indicated that it had identified certain due diligence findings not previously known to Management IX that materially impacted its original business case for the transaction and verbally revised its proposed purchase price to $6.10 per Share. Smart & Final's management thereafter discussed and clarified for Management IX the due diligence items raised.
On March 25, 2019, Management IX submitted a revised proposal from the $6.75 per Share purchase price contained in its March 18, 2019 proposal to $6.30 per Share citing certain due diligence findings as contributing factors for this revision and indicated that its revised proposal was its "best and final" offer. Later that day, Management IX and Smart & Final agreed to amend the First Exclusivity Agreement so that it expired effective as of the beginning of business on that day.
On March 28, 2019, Management IX submitted a proposal that it described as its absolute final offer of $6.50 per Share in cash. The proposal specified, among other things, that (i) the offer would expire in the afternoon on March 29, 2019 unless prior to such deadline Smart & Final re-entered into exclusivity with Management IX through April 12, 2019, or alternatively agreed to reimburse Management IX's expenses in the event a transaction did not materialize between the parties, and (ii) the Ares Stockholders would be required to enter into a support agreement agreeing to tender their Shares into the Offer and which obligation would not terminate even if the Smart & Final Board were to change its recommendation to stockholders with respect to the transaction with Parent and the Offeror.
On April 5, 2019, Kirkland & Ellis, LLP ("Kirkland"), Smart & Final's newly engaged legal counsel, sent a revised draft of the proposed merger agreement to Morgan Lewis & Bockius LLP ("Morgan Lewis"), counsel to Management IX, reflecting the following counterproposal: (i) requiring that any support agreement entered into by the Ares Stockholders must terminate if the Smart & Final Board were to change its recommendation to stockholders, (ii) a termination fee of 3% of Smart & Final's equity value, (iii) a reverse termination fee of 7% of Smart & Final's enterprise value, (iv) "Superior Offer," defined as a transaction involving 50% or more of Smart & Final's assets or outstanding Shares, or involving one of Smart & Final's two business divisions, and (v) an outside termination date of four months that would automatically extend for an additional two months if the Regulatory Condition was not satisfied at the end of such four-month period.
On April 6, 2019, representatives of Management IX called representatives of Jefferies and Citi stating that exclusivity would be required for Management IX to complete its due diligence review. On April 8, 2019, representatives of Management IX again called representatives of Jefferies and Citi to reconfirm its $6.50 per Share proposal, to confirm the progress that had been made with its legal due diligence review and that, subject to reentering exclusivity through April 15, 2019, with a focused due diligence review, it could be in a position to sign an agreement as soon as April 11 or 12.
From March to mid-April 2019, Management IX held numerous conversations with its potential debt financing sources. Management IX determined to pursue a bifurcated approach in which it would receive separate financings based on Smart & Final's Smart Foodservice store banner business, on the one hand, and Smart & Final's other businesses, on the other hand. During this period, Morgan Lewis, other advisors of Management IX, and Kirkland held conversations regarding Management IX's contemplated bifurcated financing structure.
Over the course of the first half of April 2019 and on April 16, 2019 prior to the Smart & Final Board meeting, Morgan Lewis and Kirkland continued to negotiate the terms of the merger agreement and ancillary documents (including the equity commitment letter and limited guarantee), with particular focus on, among other terms, provisions relating to each party's obligations with respect to the contemplated debt financing, deal protections, remedies and specific performance.
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On April 11, 2019, on behalf of Smart & Final, representatives of Jefferies and Citi approached representatives of Management IX to request an increase in Management IX's proposed purchase price to $6.75 per Share in exchange for entering into another exclusivity agreement. Management IX rejected such request and indicated that it would withdraw its proposal if Smart & Final did not enter into another exclusivity agreement.
On April 12, 2019, Morgan Lewis sent a revised draft of the proposed merger agreement to Kirkland reflecting the following counterproposal: (i) accepting that the support agreement entered into by the Ares Stockholders would terminate upon a Smart & Final Board change of recommendation, (ii) accepting a termination fee of 3% of Smart & Final's equity value, (iii) counterproposing a reverse termination fee of 6% of Smart & Final's equity value, (iv) counterproposing that "Superior Offer" be defined as a transaction involving 80% or more of Smart & Final's assets or outstanding Shares and (v) counterproposing a three-month outside termination date with a one-month extension to satisfy the Regulatory Condition, but indicating that Management IX was willing to consider a longer outside termination date subject to discussion with lenders of the Offeror regarding the corresponding outside termination date under the debt financing commitments of the Offeror's subsidiaries. Morgan Lewis also raised a new issue regarding the treatment and acceleration of outstanding employee equity awards in connection with the potential transaction with Smart & Final. Representatives of Kirkland made clear to Morgan Lewis that any resolution of the treatment and acceleration of outstanding employee equity awards would not affect the per Share consideration paid in the proposed transaction with Parent and the Offeror. Later that evening, Management IX signed the Second Exclusivity Agreement with Smart & Final with an expiration time of noon Pacific time on April 15, 2019.
On April 15, 2019, representatives of Management IX discussed termination fees with Jefferies and Citi, with Management IX and Smart & Final subsequently agreeing to a termination fee of $15 million (or approximately 3% of Smart & Final's equity value) and a reverse termination fee of $30 million (or approximately 6% of Smart & Final's equity value). Also that day, Mr. Hirz expressed his concern to representatives of Management IX regarding employee retention if outstanding employee equity awards were not accelerated and paid out to employees as part of the proposed transaction. Management IX agreed to permit the outstanding employee equity awards to be cancelled and converted into the right to receive payment on the terms set forth in Item 11 under the heading "The Merger Agreement—Effect of the Merger on Capital Stock—Treatment of Awards." No terms of any post-closing employment or post-closing equity participation in the surviving company were discussed by Management IX with Mr. Hirz or any other member of Smart & Final's management at any time prior to signing the Merger Agreement.
Later that afternoon and evening, Morgan Lewis and Kirkland continued to negotiate the terms of the merger agreement and other transaction agreements (including the equity commitment letter and limited guarantee) to finalize remaining drafting and other issues. Following clarity on the regulatory approvals involved with the proposed transaction and discussion with lenders of the Offeror, Management IX agreed with Smart & Final's position of an outside termination date of four months, followed by an automatic two-month extension if the Regulatory Condition had not been satisfied.
Subsequent to the April 16 meeting of the Smart & Final Board, Smart & Final, Parent and the Offeror executed and delivered the Merger Agreement and the related transaction documents and after the closing of trading on the NYSE on April 16, 2019, Smart & Final and Management IX, on behalf of certain equity funds managed by it, issued a joint press release announcing the execution of the Merger Agreement and the anticipated commencement of the Offer.
On May 8, 2019, due to the expected regulatory review and approval timing under applicable Mexican competition law, Smart & Final and Parent mutually agreed to commence the Offer on May 14, 2019 with an initial expiration date of June 17, 2019.
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| To: richardred who wrote (5206) | 5/15/2019 8:32:04 AM | | From: richardred | | | | B&G Foods Acquires Clabber Girl Corporation
May 15, 2019 08:00 AM Eastern Daylight Time
PARSIPPANY, N.J.--( BUSINESS WIRE)--B&G Foods, Inc. (NYSE: BGS) announced that effective today it has acquired the Clabber Girl Corporation, a leader in baking products, including baking powder, baking soda and corn starch, from Hulman & Company. In addition to Clabber Girl, the number one retail baking powder brand, Clabber Girl Corporation’s product offerings include the Rumford, Davis, Hearth Club and Royal brands of retail baking powder, baking soda and corn starch, and the Royal brand of foodservice dessert mixes.
“We are pleased to announce the addition of Clabber Girl to our portfolio of brands”
Tweet this B&G Foods expects the acquisition to be immediately accretive to earnings per share and free cash flow and projects that the acquired business will generate approximately $70 to $75 million of net sales on an annualized basis.
“We are pleased to announce the addition of Clabber Girl to our portfolio of brands,” stated Kenneth G. Romanzi, President and Chief Executive Officer of B&G Foods. “This acquisition is consistent with our longstanding acquisition strategy of targeting well-established brands with defensible market positions and strong cash flow at reasonable purchase price multiples. Clabber Girl Corporation is the number one manufacturer of branded retail baking powder and also holds leadership positions in baking soda and corn starch.”
B&G Foods funded the acquisition and related fees and expenses with cash on hand and revolving loans under its existing credit facility.
About Clabber Girl Corporation
Clabber Girl Corporation is the manufacturer of Clabber Girl Baking Powder, the #1 retail baking powder brand in the nation. For more than 150 years, Clabber Girl has earned the trust of home cooks and culinary professionals alike. Today, Clabber Girl is more than just baking powder; it is a leader in the food industry. Recently, it has expanded its product offerings to include a broader range of cooking and baking ingredients, creating a stronger presence in retail, foodservice and industrial markets. For more information, please visit www.clabbergirl.com.
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, Cream of Wheat, Green Giant, Las Palmas, Le Sueur, Mama Mary’s, Maple Grove Farms, Mrs. Dash, New York Style, Ortega, Polaner, SnackWell’s, 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. |
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| To: richardred who wrote (5209) | 5/15/2019 8:53:30 AM | | From: E_K_S | | | | The acquisition is close to spices and expands their footprint into baking/cooking kitchens/restaurants. Wonder if they make the leap into grains/flour and specialty non-GMO flours (ie almond meal, coconut flour) and even dried grains/beans. This is th move to healthy foods.
I did not see a price
B&G Foods expects the acquisition to be immediately accretive to earnings per share and free cash flow and projects that the acquired business will generate approximately $70 to $75 million of net sales on an annualized basis.
Seems like a good fit.
Any idea what they paid? My guess is between 4x-6x sales (hopefully less).
EKS |
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| To: E_K_S who wrote (5210) | 5/15/2019 9:27:08 AM | | From: richardred | | | | I agree it does seem like a good fit. I did not see the price paid disclosed yet. We should be able to tell soon on the bank line of credit tapped. I also like the diverse customer base for it's products, including private label.
I saw they own Davis to. My mother baked a lot. You can believe me when I say she was brand name conscious in most of what she used. I'll never forget this can. I see they also own a baking soda line also. You've already heard of that Iconic ARM & Hammer /Church & Dwight brand name and the products besides baking it's used in. Hopefully there number 2 in that category and can cave out private label and institutional corporate kitchen business. I guess we will find out soon if Wall Street like this move in what is set to be a triple digit loss start.
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| To: richardred who wrote (5211) | 5/15/2019 9:30:24 AM | | From: E_K_S | | | | Also exactly what management said they would do in any acquisition. Our CEO has a plan and is in no rush to get those products that help expand their brand/image. Just pay a fair price and wait for the right products.
Collecting the dividend while I wait too.
EKS |
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| To: E_K_S who wrote (5212) | 5/15/2019 9:37:03 AM | | From: richardred | | | | | I saw this and was impressed they stuck to their guns. I'm fairly sure they were under some replacement pressure when they sold Pirate Brands to Hershey. |
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