The CEO of US frozen-food firm Overhill Farms has said the sale of the business to peer Bellisio Foods is the best way to maximise value for shareholders.
Overhill yesterday (15 May) announced a deal to sell to Bellisio Foods for US$80.9m. The transaction is subject to the approval for Overhill’s shareholders. They will receive $5.00 a share, which the company said was 25% above its average share price over the 60 days to 13 May.
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“After conducting an extensive review of potential strategic alternatives, our board concluded that this all-cash transaction was the best path to maximizing value for our shareholders,” Overhill chairman and CEO James Rudis said.
The management of Overhill said last summer it had attracted interest from “several parties”. In March, one shareholder, Cordoba Asset urged Overhill’s board to sell the business, arguing poor management had left the company “deeply under-valued”. At the time, Rudis said he was in talks over a possible deal.
Reflecting yesterday on the agreement with Bellisio, Rudis said: “We know that our customers will continue to be well served, and that the clear synergies in this transaction will make both companies stronger.” The two companies already co-manufacture and distribute frozen products under the Boston Market brand.
Overhill also supplies retailers including Safeway Inc and Target Corp. and manufacturers like Pinnacle Foods.
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By GlobalDataAlongside news of the deal, Overhill reported a fall in half-year profits on the back of higher SG&A costs and lower sales.
Bellisio is owned by US private-equity firm Centre Partners Management, which snapped up the business in 2011.
