No Belmont But Plenty of Bucks for Repole, as Pirate’s Booty Sells for $195 Million

Repole with Booty

It’s not quite a Vitaminwater-sized payday for the company’s former president, Mike Repole, but for nearly $200 million, Repole and the other investors in snack food company Pirate Brands should keep the horses Repole loves deep in hay and alfalfa for quite a while.

This morning, B&G Foods, a publicly-traded company that has multiple grocery brands, announced it had acquired Pirate Brands, the maker of Pirate’s Booty and other child-focused snack foods, for $195 million. Pirate’s Booty has largely thrived in natural and specialty channels, but since Repole came on board the brand has expanded its presence to club, drug and grocery accounts and accelerated sales to the point where B&G reported that it expected to sell between $80 and $90 million of the cheddar-covered puffed grains in the coming year.
Repole declined to reveal the amount of his initial investment but told BevNET in an e-mail “if you were an investor in Pirate’s Booty, today is a great day.”

After the $4.2 billion Vitaminwater sale, Repole dedicated himself to building a slate of companies that had the potential to be turned into long-term successes. He bought a majority stake in

Pirate’s Booty in 2009, keeping founder Rob Ehrlich on board as CEO but stocking the kiddie favorite with many old friends from the Glaceau days.

Ehrlich, meanwhile, took some of the proceeds he made from the investment by Repole and private equity firm VMG and put it into building his own beverage brand, Rob’s Really Good.

Repole, who has also invested in a strong stable of racehorses, had three entrants in last weekend’s Belmont Stakes but did not win.

In a statement released to the media this afternoon, Repole said, “I am very pleased to be a part of this successful transaction that clearly benefits our employees, our customers, and the entire Pirate Brands’ family. I am also very proud of what the Pirate Brands’ team was able to accomplish over the past five years — increasing sales more than three-fold and firmly establishing Pirate’s Booty as an iconic brand in the better-for-you category providing healthier, fun and delicious snacks for the whole family.  The management and employees did an outstanding job driving the brand’s growth through their commitment, passion and creative energy, and now as part of B&G Foods, the company will have access to additional resources where it will continue to thrive.”

Here’s B&G Foods’ statement:

PARSIPPANY, N.J.–(BUSINESS WIRE)–June 10, 2013–

B&G Foods, Inc. (NYSE: BGS) announced today that it has entered into an agreement to acquire Robert’s American Gourmet Food, LLC dba Pirate Brands, a leader in the all-natural snack foods category, from VMG Partners, Driven Capital Management, founder Robert Ehrlich and certain other entities and individuals, for approximately $195 million in cash.

“We are delighted to add Pirate Brands, including the iconic Pirate’s Booty, to the B&G Foods family of brands. The acquisition of this business and its collection of growing natural snack foods, marks the second addition to our snack foods portfolio since we entered the category last October,” said David L. Wenner, President and Chief Executive Officer of B&G Foods.

“VMG Partners and Driven Capital Management, under the leadership of Mike Repole, have done an outstanding job with Pirate Brands over the past five years, building upon the fun, innovative, all-natural brand originated by Robert Ehrlich in 1987. We look forward to continuing to bring consumers great-tasting, all natural snack foods they have come to love and expect from Pirate Brands,” continued Mr. Wenner.

“Consistent with our acquisition strategy, we expect the acquisition to be immediately accretive to our earnings per share and free cash flow.”

Pirate Brands’ deliciously baked, all-natural, trans fat and gluten free snack brands include Pirate’s Booty, Smart Puffs and Original Tings. B&G Foods projects that following the acquisition, Pirate Brands will generate net sales of $80 million to $90 million and adjusted EBITDA of $18 million to $20 million on an annualized basis after the business is fully integrated into B&G Foods.

B&G Foods intends to fund the acquisition with the remaining net proceeds of its recently completed senior notes offering and additional revolving credit borrowings under its credit agreement. B&G Foods expects the acquisition to close in July 2013, subject to regulatory approval and the satisfaction of customary closing conditions.

Conference Call

B&G Foods will host a conference call to discuss the acquisition at 9:00 a.m. ET on Monday, June 10, 2013. The call will be webcast live from B&G Foods’ website at www.bgfoods.com under “Investor Relations–Company Overview.” The call can also be accessed live over the phone by dialing (888) 337-8192 for U.S. callers or (719) 457-2086 for international callers.

A replay of the call will be available one hour after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the password is 3819539. The replay will be available from June 10, 2013 through June 24, 2013. Investors may also access a web-based replay of the call at the Investor Relations section of B&G Foods’ website, www.bgfoods.com.

About B&G Foods, Inc.

B&G Foods and its subsidiaries manufacture, sell and distribute a diversified portfolio of high-quality, branded shelf-stable foods across the United States, Canada and Puerto Rico. Based in Parsippany, New Jersey, B&G Foods’ products are marketed under many recognized brands, including Ac’cent, B&G, B&M, Baker’s Joy, Brer Rabbit, Cream of Rice, Cream of Wheat, Devonsheer, Don Pepino, Emeril’s, Grandma’s Molasses, JJ Flats, Joan of Arc, Las Palmas, Maple Grove Farms, Molly McButter, Mrs. Dash, New York Style, Old London, Ortega, Polaner, Red Devil, Regina, Sa-són, Sclafani, Sugar Twin, Trappey’s, TrueNorth, Underwood, Vermont Maid and Wright’s. B&G Foods also sells and distributes two branded household products, Static Guard and Kleen Guard.

Forward-Looking Statements

Statements in this press release that are not statements of historical or current fact constitute “forward-looking statements.” The forward-looking statements contained in this press release include without limitation statements related to the planned acquisition of Pirate Brands and the timing thereof; and the expected impact of the acquisition, including without limitation the expected impact on B&G Foods’ earnings per share growth, net sales, adjusted EBITDA and free cash flow. Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause the actual results of B&G Foods to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements that explicitly describe such risks and uncertainties readers are urged to consider statements labeled with the terms “believes,” “belief,” “expects,” “projects,” “intends,” “anticipates” or “plans” to be uncertain and forward-looking. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in B&G Foods’ filings with the Securities and Exchange Commission, including under Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for fiscal 2012 filed on February 26, 2013. B&G Foods undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.