B&Gs CEO Robert Cantwell says to date the "right-fit" big acquisition hasnt come along yet

B&G's CEO Robert Cantwell says to date the "right-fit" big acquisition hasn't come along yet

B&G Foods has said it is on the look-out for "big" acquisitions so long as they are the "right fit" for the company.

Earlier this month, the US company acquired Mama Mary's pizza crust maker Spartan Foods of America in a US$50m deal.

On a conference call discussing its half year results yesterday (23 July), B&G revealed once fully integrated, the Mama Mary's brand is expected to generate on an annualised basis, net sales of approximately $35m and adjusted EBITDA of approximately $7.5m. The acquisition prompted B&G to up its forecast for annual sales.

CEO Robert Cantwell said the move also made sense from a synergy point of view. B&G already owns the Don Pepino pizza sauce brand.

"It's a nice little tuck-in acquisition. We have a very strong, very good pizza sauce sold in the Northeast. We look at this as an opportunity to hopefully expand that pizza sauce because the Mama Mary's brand is in parts of this country throughout from East Coast to West Coast and we see real opportunity on our Don Pepino pizza sauce business and hopefully driving some sales combining it with the Mama Mary's business."

B&G hopes to grow Mama Mary's presence through its scale and its partnerships with retailers said Cantwell: "They didn't get everywhere just because of the nature of their business and their size. Within our retail grocery organisation, we should be able to get it in distribution where they are not. And we look at that as a real opportunity, and we look at having our pizza sauce right along with it as a real opportunity in our pizza sauce business too."

But the question arose as to whether B&G was looking at larger acquisitions. Cantwell said the company was "capable" of making bigger deals.

"We're always looking, certainly from big food companies who have...put things on the market. Right now, there is really nothing floating around per se from big food companies that would fit us. And there is a lot of smaller deals. Our last two deals were from private equity. It has to be right for us. Mama Mary's came up pretty quickly on us. And we're certainly an acquirer, who would like to do more of those. It's just a matter of what might be on the market tomorrow.

"It does not make sense for us to buy something at our multiple that we trade at or even higher, certainly we want to buy something that at turns of our multiple lower than where we trade, so shareholders get accretion they want and long-term that's a good investment for both B&G and shareholders. So, we look at bigger things, when and if they show up, but typically the multiples certainly in this market in the last couple of years have not made sense to B&G."