NEW ALBANY, Ohio – Bob Evans Farms, Inc. has completed the sale of Bob Evans Restaurants to Golden Gate Capital for $565 million plus assumption of certain net working capital liabilities. The company also finalized its $115 million acquisition of Pineland Farms Potato Co., a Mars Hill, Maine-based processor of value-added potato products serving retail and food service customers. Both transactions were announced on Jan. 24.
With the sale of Bob Evans Restaurants and acquisition of Pineland Farms, Bob Evans Farms will focus exclusively on its BEF Foods business, which is the national market share leader in refrigerated side dishes and a market share leader in sausage products in core Midwest markets. Saed Mohensi, president and CEO of Bob Evans Farms, has left the company to lead Bob Evans Restaurants. Mike Townsley, president of BEF Foods, has assumed the role of president and CEO of Bob Evans Farms.
|Mike Townsley, president and CEO of Bob Evans Farms|
“We expect to leverage our acquisition of Pineland Farms Potato Co. and our superior on-shelf performance to generate continued side-dish sales growth, particularly in expansion markets and new retail channels such as club and convenience stores,” Townsley said. “We also expect to grow in the food service channel as we partner with restaurant chains to help them better manage their costs while providing high quality products for their guests. This strategy is expected to enable a virtuous cycle of cash flow growth to: reward shareholders; attract and retain top talent; and fund capital and marketing investments which we expect to drive both retail and food service sales growth.”
Following the completion of the transactions, Bob Evans Farms repaid outstanding debt with proceeds from the sale of Bob Evans Restaurants and established a $300 million credit facility maturing April 28, 2022, said Mark Hood, chief administrative officer and CFO.
“Our near-term leverage range of 1.0-2.0x provides considerable flexibility to continue growing and investing to deliver on the Bob Evans brand promise,” Hood said. “We are also pleased to announce the board has approved a special dividend of $7.50 per share payable June 16, 2017, to stockholders of record at the close of business on May 30, 2017.”
Based in San Francisco, Golden Gate Capital is a private equity investment firm with more than $15 billion of capital under management. Other restaurant investments sponsored by Golden Gate Capital include Red Lobster, California Pizza Kitchen and On The Border Mexican Grill & Cantina.