The Parsippany, NJ-based food products manufacturer and marketer announced on Tuesday that it was buying Boulder for $11.00 per share, or about $975 million.
The acquisition will expand Pinnacle's health and wellness offerings, the company said. Pinnacle's healthy food products include the Birds Eye and Gardein brands.
"In addition to being a synergy-rich, accretive transaction with on-trend brands, the acquisition provides us with an important health and wellness talent pool in Boulder, Colorado," CEO Bob Gamgort said in a statement.
Pinnacle will keep Boulder's headquarters in Colorado, the company said.
So far today, 1.17 million shares of Pinnacle have traded, versus 997,000 shares of Pinnacle.
Separately, TheStreet Ratings team rates PINNACLE FOODS INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
We rate PINNACLE FOODS INC (PF) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 2.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, PF's share price has jumped by 29.72%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- PINNACLE FOODS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PINNACLE FOODS INC increased its bottom line by earning $2.12 versus $0.77 in the prior year. For the next year, the market is expecting a contraction of 10.0% in earnings ($1.91 versus $2.12).
- The gross profit margin for PINNACLE FOODS INC is currently lower than what is desirable, coming in at 31.39%. Regardless of PF's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.55% trails the industry average.
- Net operating cash flow has significantly decreased to $86.39 million or 61.78% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: PF
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.