Natural Food Makers Rise After General Mills Buys Annies

NEW YORK (TheStreet) -- Shares of a number of natural food makers are climbing after one of the companies in the sector, Annies (BNNY) , announced last night that it agreed to be acquired by General Mills (GIS) . In a note to investors today, research firm Oppenheimer wrote that the deal should cause the valuations of two natural food makers, Boulder Brands (BDBD) and WhiteWave (WWAV) , to rise in the near-term.

WHAT'S NEW: General Mills last night said that it had agreed to buy Annie's for $46 per share in cash, or $820M. Annies' stock closed yesterday at $33.51. General Mills expects the transaction to be accretive to its earnings in the first 12 months following the completion of the deal.

ANALYST REACTION: In a note to investors today, Oppenheimer analyst Rupesh Parikh wrote that the acquisition of Annie's could cause the valuations of stocks in the natural foods sector to rise significantly. The terms of the acquisition of Annies imply a nearly 40x P/E multiple to consensus FY15 forecasts for the company, according to Parikh. The shares of Boulder Brands and WhiteWave should advance in the near-term, added the analyst, who kept Outperform ratings on both names.

PRICE ACTION: In early trading, WhiteWave rose 3.9% to $37.10, while Boulder Brands jumped 7.6% to $14.25. Another stock in the sector, Hain Celestial (HAIN) , advanced 3.5% to $101.17, while Annies surged 37% to $46 and General Mills slipped 0.5% to $53.26.

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