Bumble Bee Seafoods, LLC To Acquire Castleberry/Snow's Brands, Inc., And Assets Of Sara Lee Shelf-Stable Meats Business
U.S.$138 Million Transactions Strengthen Bumble Bee as a Leading North American Branded Seafood and Canned Protein Foods Company
San Diego, CA - Bumble Bee Seafoods, LLC announced that it has executed a U.S.$93 million transaction agreement with Castleberry/Snow's Brands, Inc., which will involve merging a subsidiary of Bumble Bee into Castleberry. Separately, Bumble Bee also announced that it has entered into a transaction agreement with Sara Lee Corporation, and certain of its affiliates, for the purchase of a substantial portion of the assets of Sara Lee's shelf-stable meats business – which include the Sweet Sue® and Bryan® brands – for U.S.$45 million.
According to Bumble Bee President and Chief Executive Officer Christopher D. Lischewski, the two transactions will strengthen the company's position as one of North America's brand leaders in quality seafood and canned protein foods.
"Our strategy has been to focus on acquiring a number of nationally leading product lines and businesses that have delivered stable earnings and consistent cash flow," explained Lischewski. "The addition of the Castleberry/ Snow's Brand, Sweet Sue and Bryan businesses to our portfolio represents a significant move towards our vision of becoming a leader in value-added seafood and canned protein foods."
Castleberry is a manufacturer and marketer of regionally prominent, shelf-stable prepared foods. Castleberry holds the leading national position for canned clams, clam juice, and hot dog chili sauce. It also has the second largest market share for branded beef stew, and holds the number three position in the clam chowder category. Castleberry products are available in every major market in the United States.
Sara Lee is a manufacturer and distributor of canned and pouched chicken, beef, and pork products – made available through retail and foodservice – and primarily under the Sweet Sue and Bryan brands. Sweet Sue is a leading brand of chicken and dumpling, and pouched chicken products. The brand has an estimated 60 percent market share in certain geographic markets. Bryan is a leading brand of canned meat in several regions throughout the U.S. The Bryan brand will be used under license by Bumble Bee from Sara Lee, which will continue to produce and sell frozen and refrigerated packaged meat products under the Bryan name.
Castleberry recorded revenues of U.S.$134.5 million and EBITDA of U.S.$12.1 million for the twelve months ended October 17, 2004. Bumble Bee estimates the revenue and EBITDA for Sweet Sue/Bryan to be approximately U.S.$79.4 million and U.S.$8.5 million respectively for the twelve months ended October 2, 2004.
Lischewski said, "Castleberry, Sweet Sue and Bryan will provide Bumble Bee with an immediate platform to enter the canned meat market. When completed, these transactions will lend to building an increasingly profitable branded food products company with attractive growth potential."
He added that the complementary nature of the additional brands to Bumble Bee's existing product line would mean significant synergies would be realized. "Consolidation of distribution and storage facilities, reduction of general administrative expenses, and enhanced purchasing opportunities in packaging materials are among the rewards of adding Castleberry, Sweet Sue and Bryan. In addition, synergies are expected to be achieved in sales and marketing, as the companies use some of the same food brokers and sales forces. Finally, the acquisitions will enable Bumble Bee to solidify many of its existing customer relationships and increase distribution of its other product lines into certain geographical areas where it has not had a strong presence," Lischewski said.
He concluded that completion of the transactions would mean additional employment opportunities within the company, including in San Diego.
Bumble Bee Seafoods LLC, headquartered in San Diego, is the U.S. operating subsidiary of Connors Bros. Income Fund (TSX:CBF.UN) – a limited purpose trust established under the laws of Ontario, Canada. Connors Bros. owns a majority interest in both Bumble Bee and Clover Leaf Seafoods, L.P., its Canadian operating subsidiary. Together, these two operating companies comprise North America's largest branded seafood company, offering a full line of canned tuna, salmon, sardine, and specialty seafood products marketed under leading brands including Bumble Bee®, Clover Leaf®, Brunswick® and Beach Cliff®.
The Bumble Bee brand has established significant consumer awareness and loyalty based on the superior quality of its seafood products. For more information on Bumble Bee, visit www.bumblebee.com.
Source: Bumble Bee Seafoods, LLC