US health food firm Smart Balance has signed a deal to acquire domestic gluten-free bread and baked goods specialist Udi’s Healthy Foods for US$125m.
Smart Balance will purchase Udi’s from majority shareholder Hubson Acquisition, an affiliate of E&A Industries, it said today (1 June).
Based in Denver, Udi’s markets gluten-free products under? the ‘Udi’s Gluten Free Foods’ brand in the retail market, and since mid-2011, foodservice channels. In the 12-month period to the end of March, Udi’s sales doubled to $60.9m.
“We are excited to add Udi’s Healthy Foods to our portfolio of health and wellness brands. Udi’s has built a strong brand with a very loyal following in gluten-free bread,” said Smart Balance chairman and CEO Stephen Hughes.
“Udi’s leading bread and bakery portfolio is the perfect complement to Glutino’s wide range of grocery products. With this transaction, we will offer them most comprehensive portfolio of gluten-free products to address one of the fastest growing categories in the food industry.”
Smart Balance acquired Canadian gluten-free food producer Glutino Food Group in August last year in a deal worth $66.3m.
The acquisition of Udi’s will be financed with the proceeds of a new $280m senior secured credit facility, which will include a $40m revolver. The deal will be treated as an asset purchase for tax purposes, the company said, and as a result it expects to realise future cash tax benefits of around $22m, resulting in an effective purchase price of around $103m.
The transaction is expected to close in July.