Smart Balance to Acquire Udi's
Smart Balance, Inc. has signed a definitive agreement to acquire Udi’s Healthy Foods, LLC (Udi’s) for $125 million in cash from majority shareholder Hubson Acquisition, LLC, an affiliate of E&A Industries based in Indianapolis, the family of founder Udi Bar-on, and other minority holders. The acquisition will
be treated as an asset purchase for tax purposes. As a result, the Company expects to realize future tax benefits with a present value of approximately $22 million¹, resulting in an effective purchase price of approximately $103 million.
Based in Denver, CO, Udi’s markets gluten-free products under the “Udi’s Gluten Free Foods” brand in the retail market, and since mid-2011, food service channels. Udi’s is a leading brand in gluten-free bread and baked goods. In addition, Udi’s markets other gluten-free products, including frozen pizza and granola. In the twelve month period ended March 31, 2012, Udi’s sales doubled to $60.9 million.
Smart Balance Chairman and Chief Executive Officer Stephen Hughes stated, “We are excited to add Udi’s Healthy Foods to our portfolio of health and wellness brands. Udi’s has built a strong brand with a very loyal following in gluten-free bread, which includes over 1,000,000 ‘Friends of Udi’s’ social marketing followers. Udi’s leading bread and bakery portfolio is the perfect complement to Glutino’s wide range of grocery products. With this transaction, we will offer the most comprehensive portfolio of gluten-free products to
address one of the fastest growing categories in the food industry. This portfolio of gluten-free brands and products will enable us to offer all retailers in North America a one stop strategic partner to address the growth in gluten-free.”
Commenting on the transaction, E&A Industries Partner and CEO of Udi’s Healthy Foods Devin Anderson stated, “This is an excellent development for the Udi’s organization, as it represents an outstanding opportunity to bring together two companies which share similar corporate visions, principles and growth objectives committed to meeting consumer needs. We are proud of our grassroots, digital and social media strategies that engaged consumers to help
Udi’s grow from $4.3 million in net sales in 2009 to an annualized run-rate of $72.4 million in net sales, based on first quarter 2012 results. Combining our organizations will allow Udi’s to continue on its significant growth path and leverage Smart Balance’s strategic leadership. We look forward to working together to grow its health and wellness platform and are confident
the Udi’s business will thrive under Smart Balance’s direction.”
Furthermore, Hughes stated, “This acquisition will be transformational to our company, as it will position Smart Balance as a leader in gluten-free, accelerate our growth rate, and further diversify our mix toward high-growth natural brands. The gluten-free category is now a cornerstone strategy within our corporate vision of creating a health and wellness platform that addresses highly-motivated consumer need states. As our Smart Balance®, Earth Balance® and Bestlife™ brands address the health and wellness needs of consumers, Udi’s and Glutino address a specific dietary need by eliminating gluten in foods that certain consumers have to avoid for health reasons."
“We see future revenue growth opportunities and cost synergies throughout our entire organization as a result of this acquisition. With this acquisition, we believe our sales, marketing and product development capabilities we are leveraging with Glutino will help Udi’s continue on its remarkable growth trajectory. We look forward to partnering with our new colleagues from Udi’s to become the experts in gluten-free products and create a trulycomprehensive gluten-free solution for retailers and consumers,” Hughes remarked.
“Regarding Glutino,” Mr. Hughes concluded, “we are beginning to see benefits associated with the consolidation of this acquisition and, while reduction of distributor inventory impacted our sales to customers in the past two quarters, inventory levels are now stable. As expected, Glutino net sales are now tracking retail sales.”
be treated as an asset purchase for tax purposes. As a result, the Company expects to realize future tax benefits with a present value of approximately $22 million¹, resulting in an effective purchase price of approximately $103 million.
Based in Denver, CO, Udi’s markets gluten-free products under the “Udi’s Gluten Free Foods” brand in the retail market, and since mid-2011, food service channels. Udi’s is a leading brand in gluten-free bread and baked goods. In addition, Udi’s markets other gluten-free products, including frozen pizza and granola. In the twelve month period ended March 31, 2012, Udi’s sales doubled to $60.9 million.
Smart Balance Chairman and Chief Executive Officer Stephen Hughes stated, “We are excited to add Udi’s Healthy Foods to our portfolio of health and wellness brands. Udi’s has built a strong brand with a very loyal following in gluten-free bread, which includes over 1,000,000 ‘Friends of Udi’s’ social marketing followers. Udi’s leading bread and bakery portfolio is the perfect complement to Glutino’s wide range of grocery products. With this transaction, we will offer the most comprehensive portfolio of gluten-free products to
address one of the fastest growing categories in the food industry. This portfolio of gluten-free brands and products will enable us to offer all retailers in North America a one stop strategic partner to address the growth in gluten-free.”
Commenting on the transaction, E&A Industries Partner and CEO of Udi’s Healthy Foods Devin Anderson stated, “This is an excellent development for the Udi’s organization, as it represents an outstanding opportunity to bring together two companies which share similar corporate visions, principles and growth objectives committed to meeting consumer needs. We are proud of our grassroots, digital and social media strategies that engaged consumers to help
Udi’s grow from $4.3 million in net sales in 2009 to an annualized run-rate of $72.4 million in net sales, based on first quarter 2012 results. Combining our organizations will allow Udi’s to continue on its significant growth path and leverage Smart Balance’s strategic leadership. We look forward to working together to grow its health and wellness platform and are confident
the Udi’s business will thrive under Smart Balance’s direction.”
Furthermore, Hughes stated, “This acquisition will be transformational to our company, as it will position Smart Balance as a leader in gluten-free, accelerate our growth rate, and further diversify our mix toward high-growth natural brands. The gluten-free category is now a cornerstone strategy within our corporate vision of creating a health and wellness platform that addresses highly-motivated consumer need states. As our Smart Balance®, Earth Balance® and Bestlife™ brands address the health and wellness needs of consumers, Udi’s and Glutino address a specific dietary need by eliminating gluten in foods that certain consumers have to avoid for health reasons."
“We see future revenue growth opportunities and cost synergies throughout our entire organization as a result of this acquisition. With this acquisition, we believe our sales, marketing and product development capabilities we are leveraging with Glutino will help Udi’s continue on its remarkable growth trajectory. We look forward to partnering with our new colleagues from Udi’s to become the experts in gluten-free products and create a trulycomprehensive gluten-free solution for retailers and consumers,” Hughes remarked.
“Regarding Glutino,” Mr. Hughes concluded, “we are beginning to see benefits associated with the consolidation of this acquisition and, while reduction of distributor inventory impacted our sales to customers in the past two quarters, inventory levels are now stable. As expected, Glutino net sales are now tracking retail sales.”