B&G Foods to buy Del Monte broth brands for $110M

The basics:

• Parsippany-based B&G Foods is acquiring Del Monte’s broth and stock business for $110M
• Deal adds iconic pantry brands College Inn and Kitchen Basics to B&G’s portfolio
• Acquisition stems from a bankruptcy court-supervised auction tied to Del Monte’s Chapter 11 case
• B&G expects the brands to deliver up to $120M in annual sales and boost earnings

Parsippany-based consumer-packaged goods giant B&G Foods Inc. is acquiring bankrupt canned food maker Del Monte Foods‘ broth and stock business in a deal worth $110 million.

As part of the acquisition announced Jan. 15, B&G will expand its shelf-stable food portfolio with iconic pantry names such as College Inn and Kitchen Basics.

The purchase stems from a court-supervised auction tied to Del Monte’s on-going bankruptcy proceedings.

Citing challenges related to “a dynamic macroeconomic environment,” Del Monte filed for Chapter 11 last summer in U.S. Bankruptcy Court for the District of New Jersey. At the time, the 139-year-old California company said selling its assets would be the most effective way to turn around the business.

Besides B&G, Del Monte has negotiated purchase agreements with two other bidders: Fresh Del Monte Produce Inc. and Pacific Coast Producers.

Fresh Del Monte Produce will take over Del Monte’s vegetable, tomato and refrigerated fruit businesses for $285 million. Pacific Coast Producers is buying its shelf-stable fruit assets. Financial terms were not immediately disclosed.

A basket boost

B&G expects to complete the acquisition during the first quarter of 2026, pending bankruptcy court approval.

The company said it intends to fund the purchase with cash on hand that includes resources from divestitures and revolving loans under an existing credit facility.

Besides strengthening its presence in core grocery categories, B&G expects the deal to generate an immediate boost to profits.

According to the company, the College Inn and Kitchen Basics brand are forecast to bring in about $110 million to $120 million a year in sales and add between 8 to 12 cents per share to earnings.

Additionally, because it’s an asset purchase, B&G expects about $15 million in tax benefits over time.

B&G’s eclectic portfolio of 50-plus names includes supermarket staples Cream of Wheat, Crisco, Dash, Ortega, Maple Grove Farms, New York Flatbreads, McCann’s Irish Oatmeal, Molly McButter, Polaner and Skinnygirl.

As of fiscal year 2024, B&G had net sales of $1.93 billion. For the fiscal year 2025 ending Jan. 3, the company has said it anticipates an annual net sales figure of $1.83 billion to $1.88 billion.

Menu changes

After reorganizing into four business units in 2022 – Spices & Flavor Solutions, Meals, Frozen & Vegetables, and Specialty – B&G has been reviewing its portfolio to see which brands fit the goals set for each of the new divisions.

Since then, divestitures have included:

• Organic, plant-based snack brand Back to Nature
• Le Sueur’s U.S. shelf-stable vegetable unit and Green Giant’s U.S. canned business
• Don Pepino pizza sauce brand and Sclafani canned tomato brand
• Green Giant/La Sieur frozen and shelf-stable vegetable product lines in Canada

In a statement, B&G President and CEO Casey Keller said, “We are very excited to be the winning bidder for Del Monte’s broth and stock business and to add the College Inn and Kitchen Basics brands to the B&G Foods portfolio.”

“The College Inn and Kitchen Basics brands complement our existing portfolio of brands. College Inn and Kitchen Basics are pantry staples for consumers seeking to prepare high-quality, innovative and versatile meals at home. This acquisition is consistent with our longstanding acquisition strategy of targeting well-established brands with defensible market positions and strong cash flow at reasonable purchase price multiples,” he said.