Bruckmann, Rosser Sherrill & Co., a New York-based private equity firm founded in 1995, has purchased the Ortega brand from Nestle SA for $116 million through its platform company B&G Foods Inc., which financed the deal with a $200 million senior secured credit facility. The same facility will also be used to refinance approximately $45 million of existing debt.
Although B&G first announced the deal in July, terms were not finalized until late August, with the close occurring on Aug. 21. B&G retained Lehman Brothers as financial advisors and Dechert LLP led its legal team.
With pro forma revenue of approximately $370 million in 2002, Ortega will be the largest single contributor to B&G’s top line and EBITDA growth at 20% and 27% respectively, according to an SEC filing. With high brand awareness in the shelf-stable Mexican food sector that generates $1.5 billion in annual sales, B&G sees the acquisition as a way to strengthen its portfolio.
“We’ve been looking at this business for a while, and were attracted by its slow, steady growth,” said Al Soricelli, and executive vice president with B&G since January 2000. “There were quite a few players-at least six firms [in the May auction]-and we won because the seller’s biggest concern was finding a buyer that had the money and ability to get the deal done quickly.”
According to Soricelli, B&G’s purchase will not affect operations in Ortega’s Stoughton, Wis.-based operations, as the plant, workers and management will forgo no changes.
B&G has spent more than $380 million on six acquisitions since Bruckmann captured an 80% stake in the 114 year-old company, and as of the Aug. 21 purchase date of Ortega has about $384 million of outstanding debt, according to Standard & Poor’s.
Founded in 1889, B&G has morphed from a pickle business operating out of a small store in lower Manhattan to a conglomerate that operates out of a 200,000 square foot facility in Hurlock, Md. “Ortega fits our profile perfectly, and matches our sales marketing, distribution and operations know-how,” explained Soricelli. “We already have a [Mexican food] presence on the West Coast with Las Palmas, and Ortega gives us a great East Coast-based brand.”
Ortega was housed within Nestle USA, as part of the Nestle Prepared Foods Co. business. Headquartered in Salon, Ohio, the Prepared Foods Unit generated $1.9 billion in 2002 for Nestle SA, itself raking in a whopping $50 billion in 2001. Nestle acquired Ortega from Nabisco in 1995
Based in Parsippany, N.J., B&G raked in $15 million last year on sales of $293 million, and a source said the deal should close by November.