B&G Foods Shoots Higher on Green Giant Purchase
By: Tim McPartland,
B&G Foods—one of our common stock holdings, has shot higher today, by around $4/share, on the announcement that they would be purchasing the Green Giant Brand line of foods from General Mills.
General Mills has been shopping the brand for most of this year and a sale price of $765 million seems to be darned good given the slow/no growth food categories they are in.
B&G Foods is a food company that historically has purchased ‘orphan’ food brands and has succeeded in milking profits from them with SG&A (selling, general and administration) cost that is way below the major food companies that sell them the brands. For instance Accent brand seasonings and Underwood meats were purchased from Pillsbury as the sales from these brands is relatively small and they are lost in the pile of billion dollar brands these companies own.
We are touched by this transaction in many ways. We own B&G, we live in the ‘Valley of the Jolly Green Giant’ and our pension checks (both my wife and I) come from General Mills and between us we have worked for Green Giant, Pillsbury and General Mills.