Pinnacle Foods To Purchase Boulder Brands

• Shares of Boulder Brands Inc BDBD gained more than 8 percent early Tuesday morning after the company has agreed to sell itself to Pinnacle Foods Inc PF for $11 per share.
• Pinnacle said in a press release the acquisition will expand its presence in growing and complementary health and wellness categories.
• The transaction values Boulder Brands at $975 million.

Pinnacle Foods, a marketer and distributor of high-quality branded food products, has agreed on Tuesday to acquire Boulder Brands, a food company that is focused on the rapidly growing health and wellness segment.

Pinnacle Foods will pay $11 per share to acquire Boulder Brands in a transaction that values the company at $975 million. Boulder Brand's stock closed at $10.07 on Monday.

Pinnacle Foods said in a press release that the acquisition will give the company a greater presence in the natural and organic retail channel and also offers a new growth platform in refrigerated foods.

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Boulder Brands' portfolio includes Udi's® and Glutino® gluten-free products, EVOL natural frozen meal offerings, and Smart Balance® and Earth Balance® refrigerated and shelf-stable spreads businesses. They are sold in both the traditional and natural and organic channels in the US.

Boulder Brands' annual net sales totaled over $500 million in 2014.

"The acquisition of Boulder Brands further expands our health and wellness portfolio, currently anchored by the Birds Eye® and gardein™ brands," Pinnacle Foods CEO Bob Gamgort said in the company's press release. "In addition to being a synergy-rich, accretive transaction with on-trend brands, the acquisition provides us with an important health and wellness talent pool in Boulder, Colorado. In this regard, we plan to retain Boulder's existing headquarters location."

The transaction will be funded with Pinnacle Foods' cash on hand and new debt. The company expects synergies and previously identified cost savings will yield a 50 percent increase in Boulder Brands' 2015 consensus adjusted EBITDA of $62 million over the next two years.

Pinnacle Foods will provide 2016 guidance, inclusive of Boulder Brands, during its fiscal 2015 year-end earnings conference call in February 2016.