Investors liked the November 22 news that Vancouver-based food manufacturer Premium Brands Holdings Corp. (TSX:PBH) is buying several U.S. companies as the company’s shares spiked more than 7%.
The company has completed transactions to buy:
•Minnesota-based Buddy’s Kitchen Inc. from its founding family and management;
•California-based Raybern Foods from TSG Consumer Partners, management and other shareholders; and
•a 50% stake in California based Shaw Bakers.
Buddy’s makes sandwiches among other items and its focus is in the airline and convenience-store channels. It operates two production facilities in greater Minneapolis: one is 91,000 square feet while the other is 62,000 square feet.
Raybern Foods makes branded specialty sandwiches for the U.S. retail market and operates a 146,000-square-foot facility in Tupelo, Mississippi.
Shaw Bakers makes and distributes fresh and frozen artisan breads as well as a range of sweet and savory pastries. It operates a 67,600-square-foot facility near San Francisco.
Combined, Buddy’s, Raybern Foods and Shaw Bakers generate approximately US$115 million in annual sales.
“These transactions both diversify and greatly enhance our sandwich platform’s growth opportunities and move it significantly closer to its objective of becoming North America’s leading sandwich manufacturer,” said George Paleologou, president and CEO of Premium Brands.
Premium Brands has been around for more than 16 years and has made more than 60 corporate acquisitions. Last year, it made the largest acquisition in its history when it bought Montreal meat packer C&C Packing Inc. and sister company Premier Meat Packers (2009) Inc. for $146 million.
Premium Brands shares have increased in value by more than 50% compared with a year ago.