VANCOUVER, Oct. 13, 2016 /CNW/ - Premium Brands Holdings Corporation (TSX: PBH), a leading producer, marketer and distributor of branded specialty food products, announced today that it has acquired 100% of the shares of Ontario based Belmont Meats Products Limited. The purchase price for the shares, which is subject to certain customary adjustments, was $50.0 million consisting of $49.2 million in cash and $0.8 million in common shares of Premium Brands.
Belmont, which has annual sales of approximately $120 million is one of the leading manufacturers of burger patties in Canada and produces a wide variety of customized premium burgers for retail and foodservice customers across the country. Belmont is also in the process of introducing a number of its products into the U.S. retail market.
"We are not only very excited about Belmont's business and the potential for it to grow under the Premium Brands umbrella, but also the role it will play in creating value in several of our other businesses. In particular we expect to generate significant synergies between Belmont's business, our burger operations in western Canada and our Centennial Foodservice business' recently announced initiative to expand into the Ontario market," said Mr. George Paleologou, President and CEO. "Furthermore, Belmont's strong management team significantly enhances our bench strength in the Ontario market," added Mr. Paleologou.
"We are very excited to be joining the Premium Brands family," said Mr. Paul Roach, President and CEO of Belmont Meats. "Premium Brands has a great track record of partnering with management to build successful businesses. We are looking forward to working with them as we expand and grow our business in both Canada and the U.S.," added Mr. Roach.
The transaction will be funded through Premium Brands' existing bank facilities and is expected to be immediately accretive to its earnings per share and free cash flow per share.
ABOUT PREMIUM BRANDS
Premium Brands owns a broad range of leading specialty food manufacturing and differentiated food distribution businesses with operations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nevada, Ohio, Phoenix and Washington State. The Company services a diverse base of customers located across North America and its family of brands and businesses include Grimm's, Harvest, McSweeney's, Piller's, Freybe, Expresco, Belmont, Hempler's, Isernio's, Fletcher's U.S., Direct Plus, Audrey's, SK Food Group, OvenPride, Bread Garden Go, Hygaard, Quality Fast Foods, Deli Chef, Creekside Bakehouse, Stuyver's Bakestudio, Gourmet Chef, Duso's, Centennial Foodservice, B&C Food Distributors, Shahir, Wescadia, Harlan Fairbanks, Maximum Seafood, Ocean Miracle, Hub City Fisheries, C&C Packing and Premier Meats.
FORWARD LOOKING STATEMENTS
This press release contains forward looking statements with respect to the Company, including its business operations, strategy and financial performance and condition. These statements generally can be identified by the use of forward looking words such as "may", "could", "will", "expect", "plan", "estimate", "project", or "believe", or the negative thereof or similar variations. Forward looking statements in this press release include expectations regarding: (i) synergies between Belmont's business and the Company's other businesses; (ii) Belmont's expansion plans in Canada and the U.S.; and (iii) the Company's earnings per share and free cash flow per share.
Although management believes that the expectations reflected in such forward looking statements are reasonable and represent the Company's internal expectations and belief as of October 13, 2016, such statements involve unknown risks and uncertainties beyond the Company's control which may cause its actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward looking statements.
Some of the factors that could affect future results and could cause results to differ materially from those expressed in the forward-looking statements contained herein include: (i) changes in the cost of raw materials used in the production of the Company's products; (ii) seasonal and/or weather related fluctuations in the Company's sales; (iii) changes in consumer discretionary spending resulting from changes in economic conditions and/or general consumer confidence levels; (iv) changes in the cost of finished products sourced from third party manufacturers; (v) changes in the Company's relationships with its larger customers; (vi) access to commodity raw materials; (vii) potential liabilities and expenses resulting from defects in the Company's products; (viii) changes in consumer food product preferences; (ix) competition from other food manufacturers and distributors; * execution risk associated with the Company's growth and business restructuring initiatives; (xi) risks associated with the Company's business acquisition strategies; (xii) changes in the value of the Canadian dollar relative to the U.S. dollar; (xiii) new government regulations affecting the Company's business and operations; (xiv) the Company's ability to raise the capital needed to fund its growth initiatives; (xv) labor related issues including potential disputes with employees represented by labor unions and labor shortages; (xvi) the loss and/or inability to attract key senior personnel; (xvii) fluctuations in the interest rates associated with the Company's funded debt; (xviii) failure or breach of the Company's information systems; (xix) financial exposure resulting from credit extended to the Company's customers; (xx) the malfunction of critical equipment used in the Company's operations; (xxi) livestock health issues; (xxii) international trade issues; and (xxiii) changes in environmental, health and safety standards. Details on these risk factors as well as other factors can be found in the Company's 2015 MD&A, which is filed electronically through SEDAR and is available online at www.sedar.com.
Unless otherwise indicated, the forward looking statements in this document are made as of October 13, 2016 and, except as required by applicable law, will not be publicly updated or revised. This cautionary statement expressly qualifies the forward looking statements in this press release.
SOURCE Premium Brands Operating LP
For further information: George Paleologou, President and CEO or Will Kalutycz, CFO at (604) 656-3100.