Industry News

Boulder Brands Acquires EVOL Foods

January 6, 2014

Boulder Brands, Inc., Boulder, Colo., acquired 100% of the equity interests of Phil's Fresh Foods, LLC, the Boulder, Colo.-based owner of EVOL Foods, for $48 million, before future tax benefits. Boulder Brands purchased EVOL from founder Phil Anson and a group of investors, including Alliance Consumer Growth and an investment vehicle created by Revelry Brands and Spier Capital Management.

EVOL manufactures and markets premium frozen convenience foods such as burritos, quesadillas, entrées, bowls and skillet meals that are made with pure and simple ingredients. In the 12-month period ending Dec. 31, 2013, EVOL’s net sales were estimated to grow 70% to $17 million.

The acquisition was financed through a combination of the company's recently expanded senior secured-term loan credit facility, its revolver and cash on hand. At close, debt is estimated to be approximately $300 million and the company's leverage ratio is estimated to be 3.9%.

For 2014, the company expects EVOL to contribute approximately $25 million in net sales, and given EVOL is in its early stages of growth, EVOL is expected to generate $1.5 million in estimated EBITDA. On a GAAP basis, EVOL is expected to be dilutive to earnings per share by approximately $0.02 per share in 2014. As a result, the company expects 2014 sales to be in the range of $540-$550 million (previous range of $515-$525 million); adjusted EBITDA to be in the range of $89-$94 million (previous range of $87-$92 million) and earnings per share to be in the range of $0.41 to $0.46 (previous range of $0.43 to $0.48).

For 2015, the company expects EVOL to be accretive to earnings per share.

"While this acquisition is relatively small in size, we believe it to have significant potential for Boulder Brands, as EVOL is a category-elastic brand in an exciting segment that will further accelerate our growth rate and diversify our mix to high-growth natural brands,” says Stephen Hughes, chairman and CEO of Boulder Brands. “Consumers are demanding pure and simple ingredients in the food they buy, and retailers are in the process of renovating their freezers with healthier alternatives. With EVOL, Boulder Brands will participate in this exciting growth opportunity with a newly defined 'pure and simple' food platform."

Furthermore, "we see considerable revenue and platform synergies with EVOL and Udi's,” Hughes adds. “EVOL has built a strong brand proven in the natural channel and a clear proof of concept in conventional retail, resulting in considerable white-space opportunity in conventional, mass and club channels. In addition, its portfolio of products is the perfect complement to Udi's wide range of gluten-free frozen baked goods. The EVOL team, led by Phil Anson, brings expertise we believe essential to building out both our EVOL and Udi's frozen platforms. This portfolio, which will include EVOL and Udi's gluten-free frozen pizzas, burritos and entrées, will enable us to offer all retailers in North America a strategic partner to help renovate their freezer cases."

"I know I speak for the entire EVOL team when I say we are enthusiastic about joining the Boulder Brands organization and keeping the company in our hometown of Boulder," says Anson, co-founder and COO. "This exciting change of control will offer us the ability to further our mission and catapult growth of the EVOL brand as we continue to redefine frozen convenience food and lead a sea change in natural and organic frozen category growth. Both Steve and I are aligned in our vision and look forward to working together to establish and grow the pure and simple health-and-wellness platform."

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