Premium Brands Holdings Corporation Announces the Acquisition of Stampede Culinary Partners and Concurrent Equity and Convertible Debenture Offerings

Core Viewpoint - Premium Brands Holdings Corporation has announced a definitive agreement to acquire Stampede Culinary Partners, Inc. for approximately US$662.5 million, which includes cash and common shares, along with potential earn-out payments based on profitability targets [1][2]. Acquisition Details - The total purchase price for the acquisition is approximately US$662.5 million, consisting of US$512.5 million in cash and US$150 million in common shares, with a potential earn-out of up to US$100 million based on Stampede's profitability over the next two fiscal years [2]. - The acquisition is expected to be immediately accretive to adjusted earnings per share, with mid-single digit percentage accretion in the first year and high-single digit percentage accretion after realizing synergies [7]. Strategic Rationale - The acquisition aims to strengthen Premium Brands' presence in the U.S. foodservice channel and enhance production capabilities through the addition of sous vide cooking capacity [6]. - The company anticipates that Stampede will benefit from trends driving growth in the protein market, which have seen sales increase from US$337 million in 2019 to a current run rate of over US$1.37 billion [4]. Financial Implications - The acquisition price represents a multiple of approximately 9.7x Stampede's estimated fiscal 2025 Adjusted EBITDA, or 7.5x after accounting for anticipated synergies [7]. - Premium Brands expects to achieve a pro forma senior funded debt to adjusted EBITDA ratio of approximately 3.0:1 and a total funded debt to adjusted EBITDA ratio of 3.9:1 following the acquisition [7]. Financing Structure - The company has entered into an agreement with underwriters for a public offering, which includes the sale of subscription receipts and convertible debentures, to raise approximately $280 million and $430 million, respectively, to partially fund the acquisition [11][12]. - The net proceeds from the offering will be used to finance the cash purchase price of the acquisition and reduce existing indebtedness under the company's revolving credit facility [13][18]. Closing Conditions - The closing of the acquisition is subject to customary conditions, including regulatory approvals, and is expected to be completed by the end of January 2026 [10].