Garden Fresh Gourmet to join Campbell after US$231m deal

Garden Fresh Gourmet to join Campbell after US$231m deal

Campbell Soup Co. has again moved to buy a US fresh foods business, striking a deal to acquire salsa-to-houmous maker Garden Fresh Gourmet for US$231m.

Privately-owned Garden Fresh Gourmet sells the "number one branded refrigerated salsa in the US", Campbell said, citing data from IRI.

The company, founded in 1998 and based in Michigan, also manufactures houmous, dips and tortilla chips.

Campbell president and CEO Denise Morrison said: "The acquisition of Garden Fresh Gourmet is another milestone in reshaping our portfolio toward faster-growing categories, including packaged fresh and organic foods. Garden Fresh Gourmet's on-trend products will provide Campbell with another growth engine to help us continue to shift our centre of gravity."

The acquisition is Campbell's latest move to inject growth into its business through M&A. It also comes almost three years since its last major deal in fresh foods. In 2012, Campbell snapped up US chilled foods company Bolthouse Farms for US$1.55bn, its largest acquisition to date.

Campbell said the Garden Fresh Gourmet business would "leverage" its Bolthouse Farms "refrigerated fresh platform" as another part of the company's fresh division.

"Garden Fresh Gourmet will allow the Campbell Fresh division to expand in the deli section of the grocery store perimeter and will complement our strong presence in the produce section. It is a logical extension of our fresh food and beverage platform that resonates with today's consumers," Jeff Dunn, president of Campbell's fresh business, said. "This is a critical next step in our journey to becoming the leader in the fast-growing packaged fresh category."

Garden Fresh Gourmet generated $100m in net sales in 2014, Campbell said. The deal will mean Campbell's fresh division will account for more than $1bn of the company's annual net sales, it added.

The acquisition is expected to be finalised in the fourth quarter of Campbell's 2014/15 fiscal year, which runs to early August.

Jack Aronson, who founded Garden Fresh Gourmet 17 years ago, will stay on as an adviser to the business. He said: "We believe Campbell is the right company to take Garden Fresh Gourmet to the next level and introduce our great products to more customers and more consumers. I know Campbell is a fitting home for the Garden Fresh Gourmet family."

Garden Fresh Gourmet has around 500 employees at its headquarters in Ferndale, Michigan. The company also has operations in three other locations in the state - Grand Rapids, Inkster and Detroit. The business will continue to operate out of Ferndale and will be led by Todd Putman, general manager for Garden Fresh, within Campbell fresh's division.

Campbell said it plans to fund the acquisition with commercial paper. It does not expect the transaction to affect its previously announced fiscal 2015 guidance but be "slightly accretive" beginning in fiscal 2015/2016.

To read why we should expect Campbell to make more acquisitions, click here.