Premium Brands Holdings Corporation, a leading Canadian producer, marketer and distributor of branded specialty food products, announced that its Washington based subsidiary, Hempler Foods Group LLC has entered into an agreement to acquire the business and certain assets of Washington based Fletcher's Fine Foods (Fletcher's US). The transaction is expected to close in September 2016 and is subject to customary conditions.
Fletcher's US, which sells a variety of premium bacon and fresh sausage products in the U.S. Pacific Northwest under the Fletcher's brand, has annual sales of approximately US$17 million. It was founded by a predecessor of Premium Brands in 1985 then later sold as part of a larger transaction in 2004. Under the terms of the transaction, Hempler's will be purchasing Fletcher's US's business and production equipment but not its plant in Algona, WA. Correspondingly, Hempler's will be transferring production of Fletcher's US's products to other manufacturing facilities in the US including its plants in Ferndale, WA and Kent, WA.
"This transaction fits perfectly with our strategy of investing in companies with strong regional brands then providing their talented management teams with the resources needed to further strengthen their business and help accelerate their growth," said Mr. George Paleologou, President and CEO. "Furthermore, this transaction brings together three of the U.S. Pacific Northwest's most iconic specialty packaged meat brands, namely Hempler's, Fletcher's, and Isernio's, which we acquired just last year. All of these brands are known for their authentic, top quality, specialty products and their long histories of community engagement and charitable giving," added Mr. Paleologou.
"I am very pleased to have Fletcher's US join our family of lead brands," said Mr. Stephen Bates, President of Hempler's. "Earlier in my career I was a proud member of the Fletcher's US organization and I am very excited about once again playing a part in the growth and development of the Fletcher's US brand."
The purchase price under the terms of the transaction is US$5.0 million, which will be adjusted if Fletcher's US's net working capital at closing is above or below a defined normalized level. The transaction is expected to be immediately accretive to both Premium Brands' earnings per share and free cash flow per share.
Source: Premium Brands Holding Corp.