What's Happening?
Premium Brands Holdings, a Canadian company, has acquired U.S.-based Stampede Culinary Partners for approximately $664 million. Stampede, headquartered in Bridgeview, Illinois, specializes in sous-vide cooking for meat and plant-based proteins. The acquisition is part of Premium Brands' strategy to expand its market-leading branded and customized cooked-protein initiatives in the U.S. The deal includes a cash payment of $512.5 million and $150 million in shares of Premium Brands. Additionally, Stampede could receive a $100 million payout if it meets certain profitability targets over the next two years. The acquisition is expected to close by the end of January, pending competition approval.
Why It's Important?
This acquisition is significant as it strengthens Premium
Brands' position in the U.S. market, particularly in the foodservice sector. By acquiring Stampede, Premium Brands gains access to additional production capacity and sous-vide capabilities, which are expected to accelerate growth. The deal is projected to increase Premium Brands' adjusted earnings per share by mid-single digits in the first year, with further growth anticipated from synergies. This move reflects a broader trend of consolidation in the food industry, where companies are seeking to expand their product offerings and market reach through strategic acquisitions.
What's Next?
Following the acquisition, Premium Brands plans to leverage Stampede's resources and complementary production capabilities to enhance its business growth. The company will fund the cash portion of the transaction through public subscription receipts, convertible notes, and existing credit facilities. As the deal awaits competition approval, stakeholders will be watching for any regulatory challenges that could impact the transaction's completion. The integration of Stampede into Premium Brands' operations will be closely monitored to assess the realization of projected synergies and growth targets.
