Sale of Bob Evans restaurants to Golden Gate Capital completes
Bob Evans Farms announced the completion of its sale of Bob Evans restaurants to Golden Gate Capital for $565 million, along with the acquisition of Pineland Farms Potato Company on April 28.
The sale is also expected to bring in between $475 million and $485 million in net proceeds.
Following the completion of the sale, Golden Gate Capital repaid outstanding indebtedness with the sale’s proceeds, and also established a $300 million credit facility maturing April 28, 2022. The company’s board has also approved a special dividend of $7.50 per share payable on June 16 to stockholders at the close of business on May 30.
Mike Townsley, president and CEO of Bob Evans, said the company is pleased with the sale of the restaurants and the acquisition of Pineland Farms Potato Company.
“I, along with the rest of the Bob Evans team, look forward to executing on the expanded set of growth opportunities ahead,” said Townsley. “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.”
Bob Evans Farms will begin to focus exclusively on its Bob Evans 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.
With the acquisition of Pineland Farms Potato Company, Bob Evans is positioned to be a higher profit and higher growth company that is expected to provide better returns to shareholders and an overall enhanced product line for customers.
“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,” said Townsley. “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.”
Golden Gate Capital, a San Francisco-based private equity investment firm, has a history of investing across a wide-range of industries and transaction types. The company’s restaurant and retail investments to-date include Red Lobster, California Pizza Kitchen, On The Border Mexican Grill & Cantina, Express and Eddie Bauer.
“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,” said Josh Cohen, Managing Director at Golden Gate Capital. “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.”