Nomad Agrees to Buy British Food Brand Aunt Bessie'sBy
Deal values prepared foods company at about $281 million
Acquisition follows deal for Goodfella’s Pizza this year
Aunt Bessie’s Yorkshire puddings and roast potatoes, the side dishes that are part of a traditional British roast dinner, have a new owner.
Nomad Foods Ltd., the frozen-foods company backed by entrepreneurs Martin E. Franklin and Noam Gottesman, has agreed to acquire British prepared foods maker Aunt Bessie’s Ltd. from owner William Jackson & Son Ltd., according to a statement Monday.
“It’s a great brand, and it’s a great combination with other great brands,” Nomad Chief Executive Officer Stefan Descheemaeker said in a Bloomberg television interview. “It makes all the sense together.”
Nomad’s U.S.-listed shares jumped as much as 2.7 percent to $18.19 Monday, the highest price intraday since September 2015. The shares were up 1.2 percent to $17.92 at 12:16 p.m. in New York trading.
The deal values Aunt Bessie’s at about 240 million euros ($281 million). That’s about 10 times the company’s adjusted earnings before interest, taxes, depreciation and amortization of 23 million euros for the fiscal year through April. The acquisition is expected to be immediately accretive to earnings, Gottesman said in the statement.
Buying Aunt Bessie’s will add the company’s frozen pies, vegetables and pastry mixes to Nomad’s portfolio of brands including Birds Eye, Findus and Iglo. It also builds out Nomad’s footprint in the U.K., adding to its acquisition of Goodfella’s Pizza completed in April. The U.K. is Nomad’s largest market by revenue, according to its annual report released last month.
Nomad, based in Feltham, England, reported first-quarter results in May, topping analyst estimates and sending shares higher as it raised earnings guidance to the high end of prior expectations. While the company’s stock fell in late 2015 and into 2016 as it integrated two large acquisitions, Nomad’s refocus on core products has helped it gain 85 percent since the start of 2017 through Friday’s close.
“By being simple and really focused, and with a reasonable size, it works pretty well and our people like it,” Descheemaeker said. Potential dealmaking in the U.S. is also a possibility, he added.
“We still have a lot to do in Europe,” he said. “The U.S. is a great market, not only in frozen foods but also in other branded food overall.”
“The company is now enjoying the opportunity to play offense,” Franklin and Gottesman wrote in the company’s 2017 annual report.
— With assistance by Ed Hammond