Bob Evans Farms Inc. announced its subsidiary, BEF Foods Inc. has acquired from Kettle Creations LLC, the Kettle Creations brand and a 100,000 square-foot, state-of-the-art food manufacturing plant located in Lima, Ohio, that produces mashed potatoes, macaroni and cheese, and other side dishes.
Kettle Creations has been a co-packer for BEF Foods' side dish business since 2009. BEF Foods has comprised a significant portion of Kettle Creations' sales volume since that time, with the remainder of sales generated by foodservice and other retail accounts. The Kettle Creations employees, approximately 100 in total, became employees of BEF Foods and are expected to stay with the company.
"This transaction is an important step in expanding the manufacturing capabilities and market presence of BEF Foods," says Bob Evans Farms Chairman and CEO Steve Davis. "Judicious acquisitions complement our product offerings and align well with our production expertise. This move is a key step in our long-term growth strategy. As we have said before, we believe BEF Foods has strong growth potential that will be realized by developing our existing businesses, and through disciplined acquisitions."
"I'm also pleased that the acquisition demonstrates our commitment to growth in our home state of Ohio," continues Davis. "This brings our total investment in the state of Ohio to $165 million through our 'BEST to Invest" initiative."
"The purchase of the Kettle Creations brand and the Lima, Ohio, production facility will allow us to vertically integrate a portion of our growing side dish and prepared foods businesses," explains President of BEF Foods Inc., Mike Townsley. "Kettle Creations also offers future growth potential to the BEF Foods business, including possible new product lines and expanded reach into the foodservice market."
"This acquisition is in line with our long-term strategy for BEF Foods," says Townsley. "We are pleased to welcome the Kettle Creations employees to the Bob Evans family and we look forward to the growth this transaction will allow for our business nationally, as well as our manufacturing presence in Ohio."
"We're excited to join the Bob Evans Farms family," says Don Klausing, president of Kettle Creations. "Bob Evans Farms is a quality brand and part of Ohio's heritage. We look forward to becoming an important contributor to Bob Evans Farms' continued growth. Kettle Creations and Bob Evans are a good fit, given each organization's commitment to product innovation and manufacturing excellence."
BEF Foods is a leading producer and distributor of retail pork sausage, refrigerated side dishes, and frozen convenience and foodservice items. The company currently operates seven food production facilities. At the end of the last fiscal year in April 2012, BEF Foods represented 19 percent of the total revenue of Bob Evans Farms Inc.
BEF Foods anticipates transaction synergies such as the utilization of its operational and supply chain expertise to drive profit margin gains in the Kettle Creations' manufacturing operations. Furthermore, leveraging account relationships established by both businesses will facilitate continued growth of the Kettle Creations brand and operations, as well as BEF Foods, in both foodservice and retail distribution channels.
"Kettle Creations is a great example of entrepreneurial success in Ohio and has been a great business partner to use," says Davis. "We are proud to welcome them to the Bob Evans family."
Lazard advised Bob Evans Farms on the transaction.
Source: Bob Evans Farms Inc.