Pinnacle Foods Inc. a company that owns popular brands like Duncan Hines and Bird Eye announced on Nov. 24 that it is buying Boulder Brands Inc. The decision was made for two reasons: One to attract younger market bracket who love organic food. Two, to lower operation costs through the amalgamation of the business enterprise networks.
Pinnacle Foods Inc. and Boulder Brands, Inc. signed a deal that will allow the former to expand its business to wider markets by adding healthy food varieties in their food lines. The food manufacturer would also develop stronger presence under the ever-growing health and wellness sphere.
To summarize it all, the move is actually a strategy for Pinnacle Foods to enter the organic food market and effectively reach the younger and health-conscious consumers.
In the deal, it states that PF means to roll out an offer to take on all of the unsettled shares of Boulder for $11.00 per share. As stated in Reuters report, this transaction is estimated to be more or less $975 million; the total also includes the $265 million of debt of the company. Nevertheless, the company's shares rose as the agreement was bared to the public.
However, the deal is subject to the prevailing closing conditions. Moreover, the paperwork to complete the transaction is expected to be done by the start of 2016.
Boulder Brands is a food manufacturer that is centered on introducing health and wellness products like Udi's and Glutino gluten-free products, Earth Balance refrigerated organic foods, and EVOL healthy frozen meals. The healthy food producer has recorded a net worth of $500 million in 2014.
On the plans to buy Boulder Brands, Bob Gamgort, Pinnacle Foods chief executive officer, said in a statement, "The acquisition of Boulder Brands further expands our health and wellness portfolio, currently anchored by the Birds Eye and gardein brands. In addition to being a synergy-rich, accretive transaction with on-trend brands, the acquisition provides us with an important health and wellness talent pool in Boulder, Colorado. In this regard, we plan to retain Boulder's existing headquarters location."
"In an environment where growth is challenged, it's terrific to tap into areas that have inherent growth in them," the chief executive further stated in a separate conference with investors and analysts.
Pinnacle Foods earned $2.6 million in sales and $248 million in profit last year. Gamgort reiterated that the team up of the companies will eventually lead to savings by solidifying manufacturing and distribution of food products that they offer.
