Pinnacle Foods to acquire Boulder Brands for $975 million

Boulder Brands Inc., based in Boulder, Colorado, makes Smart Balance as well as brands including Udi’s, Glutino gluten-free products. Furthermore, this will also expand its presence in the natural and organic retail channel, especially in refrigerated foods – a new growth sector.

Pinnacle Foods will be paying $11 a share for Boulder Brands.

Pinnacle Foods will pay $11 per share to acquire Boulder Brands in a transaction that values the company at $975 million.

Pinnacle said in a press release the acquisition will expand its presence in growing and complementary health and wellness categories. “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, Colo”.

Pinnacle said the deal was expected to add to its earnings from 2016. The deal includes roughly $265 million of debt, Pinnacle said. A sale was anticipated after Boulder Brands announced it was exploring strategic alternatives earlier this year.

With US consumers increasingly turning health-conscious and shunning processed foods, companies are looking to add products that are perceived as healthier to their portfolios.

So far in 2015 Boulder Brands has underperformed the market while Pinnacle Foods has outperformed the market.

During the third quarter, ended September 30, Boulder Brands’ net income was $354,000, equal to 1 cent per share on the common stock, which compared with a loss of $132,159,000 in the same period during the previous year.

PF shares were down 3% and BDBD shares were up 8% as of Noon Tuesday.