B&G Foods has agreed to purchase the broth and stock brands of Del Monte Foods for around $110m in cash.
The transaction is part of a wider, court‑overseen sales process following Del Monte Foods’ bankruptcy filing in July last year and involves two other buyers – Fresh Del Monte Produce and Pacific Coast Producers.
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New Jersey-headquartered B&G Foods, which owns the Crisco and Ortega brands, said it had emerged as the winning bidder for the broth and stocks business in a competitive auction process.
Its president and CEO Casey Keller said in a statement: “The College Inn and Kitchen Basics brands complement our existing portfolio of brands. College Inn and Kitchen Basics are pantry staples for consumers seeking to prepare high-quality, innovative and versatile meals at home.
“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.”
TD Cowen analyst Robert Moskow said the College Inn and Kitchen Basics brands are a “good strategic fit” for B&G Foods but at the same time he has “continued concerns about B&G’s leverage and growth headwinds”.
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By GlobalDataMoskow added in a research note: “After a long cycle of asset sales, the acquisition represents somewhat of a return to the company’s long-term strategy of acquiring ‘orphan’ brands with high brand recognition in stable categories. That said, management will have some work to do to fully stabilise College Inn.”
B&G Foods said it expects the College Inn and Kitchen Basics lines to generate annual net sales of roughly $110m to $120m, adjusted EBITDA of $18m to $22m, and adjusted diluted earnings per share of $0.08 to $0.12.
The deal follows B&G Foods’ third-quarter results issued in November showing falling sales and losses on the bottom line.
Net sales dropped 4.7% to $439.3m, while the company shifted to a net loss of $19.1m from a profit of $7.5m a year earlier. Operating income fell 78.5% to $11m.
For the first nine months of fiscal 2025, net sales were down 6.6% at $1.28bn. The net loss narrowed to $28.1m from $28.8m, while operating income declined 13.3% to $68.9m.
Meanwhile, Fresh Del Monte Produce is acquiring the bulk of Del Monte Foods’ assets for $285m. The deal includes ownership of Del Monte Foods’ vegetable, tomato and refrigerated fruit businesses.
California-based agriculture cooperative Pacific Coast Producers will acquire Del Monte Foods’ shelf-stable fruit business assets, excluding production sites.
Commenting on all three transactions, Del Monte Foods’ CEO Greg Longstreet said in a separate statement: “This outcome represents a successful result in our sale process and demonstrates the enduring value of Del Monte Foods’ brands and operations.
“These transactions will create an opportunity for our beloved brands and businesses to thrive under the ownership of three of the leading companies in the food industry.”
