Chefs' Warehouse to buy Del Monte Capitol Meat for $191.2 million
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Founded in 1926, Del Monte supplies beef, pork, lamb, veal, poultry and seafood products to Northern California.
Del Monte is expected to generate approximately $200 million to $225 million in annualized net sales in 2015. The purchase price for the business is expected to be approximately $191.2 million (subject to customary working capital adjustments as well as final audited results of the acquired entities).
The purchase price will consist of the following:
$127.5 million in cash, which will be funded from cash on hand and additional borrowings under the company's existing credit arrangements
1.2 million shares of the company's common stock (valued at $22.00 per share)
$38.3 million in convertible subordinated notes with a six-year maturity bearing interest at 2.5% with a conversion price of $29.70 per share.
In addition, the company will pay additional contingent consideration which is expected to total approximately $25.5 million (subject to certain conditions and upon the successful achievement of Adjusted EBITDA targets over the six years following the closing of the acquisition).
On a preliminary basis, the company expects its full year 2015 results, including the transaction, to be in the following ranges:
Net sales between $1 billion and $1.1 billion
Adjusted EBITDA between $68.3 million and $72 million
Net income per diluted share between $0.57 and $0.66
Modified pro forma net income per diluted share between $0.70 and $0.80
On a preliminary basis, the company expects net sales between $1 billion and $1.1 billion.
The transaction is subject to regulatory approvals, including expiration of the Hart-Scott-Rodino Antitrust waiting period and satisfaction of other customary closing conditions. The transaction is expected to close near the end of the first quarter of 2015. ■