Bob Evans Farms, Inc. (BEF Foods), New Albany, Ohio, announced two transformational transactions—sold all of its restaurants and acquired Pineland Farms Potato Co. (PFPC), Mars Hill, Maine—marking the beginning of a new era.
BEF Foods plans to sell Bob Evans Restaurants to an affiliate of Golden Gate Capital, San Francisco, for $565 million.
“Today, we announced two transactions that are a major step in our strategic transformation that we believe will continue Bob Evans’ history of success,” says Saed Mohseni, president and CEO, BEF Foods. “The sale of Bob Evans Restaurants enables us to concentrate exclusively on BEF Foods, our fastest growing and most profitable segment. We believe this focus will result in higher returns for our shareholders, and as a more focused private business, Bob Evans Restaurants will be better able to deliver on its brand promise of providing quality food and hospitality to every guest at every meal. Bob Evans Restaurants has made tremendous progress over the last few years, as our teams have strived to upgrade every aspect of the guest experience. We believe our talented restaurant teams, combined with Golden Gate Capital’s industry expertise and significant resources positions Bob Evans Restaurants well for realizing its full potential.”
“I am also pleased that we have signed an agreement to purchase PFPC,” adds Mohseni. “We believe this transaction will better enable BEF Foods to continue growing and innovating. The acquisition of PFPC not only increases our side dish production capacity, [but it also] provides capability to produce and sell diced and shredded potato products in both the retail and foodservice channels. The acquisition also diversifies our production capability by adding a second state-of-the-art potato processing facility with 180 million pounds of capacity, 50 million pounds of which are expected to come online in April 2017. Furthermore, PFPC comes with a 900-acre potato farm and is surrounded by an additional 55,000-plus acres of annual potato production. Its close proximity to tens of thousands of acres of potato production is particularly attractive as it greatly reduces transportation costs. BEF Food’s side dish product mix is expected to reach 66% of sales volume by 2020, and the PFPC acquisition mitigates the need for near term capital spending for additional capacity to meet our growth targets. Following the completion of these transactions, Bob Evans will be focused exclusively on sales and profit growth of BEF Foods.”
“The board of directors has consistently evaluated all options for creating shareholder value,” adds Doug Benham, executive chairman of BEF Foods. “From the outset, our philosophy has been to engage in a robust and deliberate process in an effort to make what we believe are the best decisions for shareholders. We believe these transactions are the best options for creating shareholder value and providing for the future success of these two great businesses.”
Following the closing of the Bob Evans Restaurants transaction, Mike Townsley, president, BEF Foods, will assume the role of president and CEO of Bob Evans.
BEF Foods is a national leader in refrigerated dinner side dishes and sausage products in its core Midwest markets.