Bob Evans Farms, Inc. (NASDAQ:BOBE) today announced the completion of its previously announced sale of Bob Evans Restaurants to Golden Gate Capital on April 28, 2017, and the completion today of its acquisition of Pineland Farms Potato Company.
The sale of Bob Evans Restaurants and the acquisition of Pineland Farms Potato Company marks the beginning of a new era at Bob Evans Farms in which the Company will focus exclusively on realizing the full potential of its BEF Foods business. BEF Foods is the national market share leader in refrigerated dinner side dishes, and is also the market share leader in sausage products in its core Midwest markets. The new Bob Evans, further strengthened by the manufacturing and intellectual capital of Pineland Farms Potato Company, is positioned to be a higher profit and higher growth company that is expected to provide better returns to shareholders and an enhanced product line for customers.
President and Chief Executive Officer Mike Townsley said, “We are pleased the sale of Bob Evans Restaurants and the acquisition of Pineland Farms Potato Company have been completed as anticipated. I, along with the rest of the Bob Evans team, look forward to executing on the expanded set of growth opportunities ahead. We expect to leverage our acquisition of Pineland Farms Potato Company 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. 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.”
Executive Chairman Doug Benham said, “The Board wishes Saed Mohseni and the entire Bob Evans Restaurant team continued success evolving the brand and providing guests with the hospitality and high-quality food that reflects the heritage of the brand. We appreciate the extraordinary talent, energy, and vision that Saed Mohseni brought to Bob Evans and are excited he continues to lead Bob Evans Restaurants following its acquisition by Golden Gate Capital. We expect Bob Evans Farms to continue a strong and growing supply relationship with Bob Evans Restaurants well into the future. Looking ahead, the Board is eager to continue partnering with Mike Townsley and Mark Hood as they lead the Bob Evans Farms team in realizing the full potential of the BEF Foods business.”
Josh Cohen, Managing Director at Golden Gate Capital, said, “We are excited to have successfully completed the acquisition of Bob Evans Restaurants, officially beginning our partnership with this exceptional brand as it enters an exciting new chapter. We are confident that Bob Evans Restaurants’ heartfelt hospitality and farm-fresh quality are key differentiators in today’s family dining space and we look forward to continuing to work with Saed Mohseni and the rest of the management team to support the organization’s long-term growth.”
Chief Administrative and Chief Financial Officer Mark Hood said, “Following the completion of these transactions, we repaid outstanding indebtedness with proceeds from the sale of Bob Evans Restaurants and established a $300 million credit facility maturing April 28, 2022. 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. 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.”
J.P. Morgan Securities LLC served as financial advisor to the Company on the sale of Bob Evans Restaurants. UBS Investment Bank served as financial advisor to Golden Gate Capital.
Bank of America Merrill Lynch, JPMorgan Chase Bank, N.A., and PNC Bank served as joint lead arrangers and joint bookrunners for the establishment of the Company’s new $300 million credit facility. Additionally, Bank of America, N.A. served as administrative agent for the facility.
