Financial results

B&G Foods’ aggressive M&A stance drives sales

By Douglas Yu contact

- Last updated on GMT

Pic: McCann's Irish Oatmeal
Pic: McCann's Irish Oatmeal
B&G’s recent acquisitions of Back to Nature and McCann’s Irish Oatmeal have driven the company’s Q2 revenue to increase by 7.4% year-over-year.

According to Bruce Wacha, B&G’s CFO, the Back to Nature procurement alone contributed $17.6m in sales to the company’s bottom line of $388.4m for the period.

The company acquired the snack maker from Mondelēz for $162.5m at the end of last year.

CEO Robert Cantwell added the company’s more recent acquisition of McCann’s Irish Oatmeal will also strengthen its position in the US hot cereal category.

B&G purchased the oatmeal brand from Treehouse Foods for $32m in cash last month as part of its on-going plan to acquire more “better-for-you brands that resonate with today’s consumers,”​ according to Cantwell.

Premium oatmeal gaining attention

Cantwell said McCann’s is a perfect complement to Cream of Wheat,​ B&G’s existing cereal brand.

“Premium oatmeal has had a lot of attention over the past a couple of years, creating a growth opportunity for smaller brands like McCann’s.

“Much like Cream of Wheat, McCann’s is a great addition to the type of high margin brands in our portfolio that we expect to continue to support our free cash flow model for years to come,”​ he added.

He said B&G is open to more acquisitions in the cereal category.

“We are always out looking for certain opportunities,” ​he said, adding the company will aggressively pursue them in order to gain a bigger foothold in center of the store.

M&A drives Q2 sales

In the earnings call with analysts, Wacha noted B&G’s other snack brands, including New York Style and Pirate’s Booty, had also had a hand in driving the company’s positive quarterly performance.

“Net sales of Pirate’s Booty increased by approximately $9m or nearly 55% to $25.2m for the quarter… [While] New York Style generated net sales of $9m, up approximately 11% compared to the same period a year ago,”​ he added.

Additionally, Cantell said B&G had benefited from its recent price increases and reductions in its promotional trade spending due to the increasing freight cost.

“We gained approximately $4.3m,”​ he said, adding the price increase could bring in another $15m in the next two quarters.

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