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How Is B&G Foods Reshaping Its Brand Portfolio for Growth?
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Key Takeaways
BGS to acquire Del Monte's broth and stock business for about $110 million.
B&G Foods expects the brands to be accretive, adding $110-$120M sales and $18-$22M adjusted EBITDA.
Deal anticipated to close in Q1 2026, with around 5.5x EBITDA multiple (roughly 4.8x after tax benefits).
B&G Foods, Inc. (BGS - Free Report) continues to sharpen its focus on core pantry categories by selectively adding established brands with steady demand profiles. The move involves the acquisition of Del Monte Foods’ broth and stock business for approximately $110 million, including the College Inn and Kitchen Basics labels, which will expand B&G Foods’ presence in core grocery categories while supporting long-term cash flow growth.
The agreement followed a competitive bidding process conducted as part of Del Monte’s Chapter 11 restructuring. The transaction still requires Bankruptcy Court approval, along with the satisfaction of customary closing conditions and the completion of two other Del Monte asset sales that are unrelated to this business. If these steps are completed as expected, the acquisition is anticipated to close in the first quarter of 2026.
B&G Foods expects the addition to be immediately accretive to profitability and cash generation soon after closing. On a run-rate basis, the acquired brands are expected to deliver annual sales of roughly $110 million to $120 million and generate adjusted EBITDA of about $18 million to $22 million, translating into an incremental earnings contribution of approximately 8-12 cents per share.
Based on the midpoint of expected EBITDA, the purchase price reflects a valuation multiple of around 5.5 times, which falls to roughly 4.8 times when anticipated tax advantages are taken into account. The asset-based structure of the transaction is expected to yield tax benefits with a net present value of approximately $15 million.
More broadly, B&G Foods has been focused on strengthening its underlying business through portfolio simplification, operational efficiencies and disciplined capital allocation. Management continues to prioritize improving margins, enhancing cash flow stability and reducing balance sheet risk through ongoing cost initiatives and divestitures. These efforts are intended to create a more focused, less complex organization with greater flexibility to pursue selective growth opportunities over time.
B&G Foods’ Zacks Rank & Share Price Performance
Shares of this Zacks Rank #3 (Hold) company have lost 1.1% over the past month, outperforming the industry’s decline of 2.9%. However, BGS underperformed the broader Consumer Staples sector and the S&P 500, which gained 2.2% and 2.3%, respectively, over the same period.
BGS Stock's Past Month Performance
Image Source: Zacks Investment Research
Is BGS a Value Play Stock?
B&G Foods currently trades at a forward 12-month P/E ratio of 8.98, which is down from the industry average of 14.83 and notably below the sector average of 16.87. This valuation positions the stock at a modest discount relative to both its direct peers and the broader consumer staples sector.
BGS P/E Ratio (Forward 12 Months)
Image Source: Zacks Investment Research
Stocks to Consider
United Natural Foods, Inc. (UNFI - Free Report) distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 1.4% and 197.2%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 52.1%, on average.
Mama's Creations, Inc. (MAMA - Free Report) manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA sports a Zacks Rank of 1. Mama's Creations delivered a trailing four-quarter earnings surprise of 133.3%, on average.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 39.9% and 44.4%, respectively, from the year-ago figures.
McCormick & Company, Incorporated (MKC - Free Report) manufactures, markets and distributes spices, seasoning mixes, condiments and other flavorful products to the food industry. It holds a Zacks Rank #2 (Buy) at present. McCormick delivered a trailing four-quarter earnings surprise of 2.2%, on average.
The Zacks Consensus Estimate for McCormick’s current fiscal-year sales and earnings implies growth of 1.6% and 2.4%, respectively, from the year-ago figures.
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How Is B&G Foods Reshaping Its Brand Portfolio for Growth?
Key Takeaways
B&G Foods, Inc. (BGS - Free Report) continues to sharpen its focus on core pantry categories by selectively adding established brands with steady demand profiles. The move involves the acquisition of Del Monte Foods’ broth and stock business for approximately $110 million, including the College Inn and Kitchen Basics labels, which will expand B&G Foods’ presence in core grocery categories while supporting long-term cash flow growth.
The agreement followed a competitive bidding process conducted as part of Del Monte’s Chapter 11 restructuring. The transaction still requires Bankruptcy Court approval, along with the satisfaction of customary closing conditions and the completion of two other Del Monte asset sales that are unrelated to this business. If these steps are completed as expected, the acquisition is anticipated to close in the first quarter of 2026.
B&G Foods expects the addition to be immediately accretive to profitability and cash generation soon after closing. On a run-rate basis, the acquired brands are expected to deliver annual sales of roughly $110 million to $120 million and generate adjusted EBITDA of about $18 million to $22 million, translating into an incremental earnings contribution of approximately 8-12 cents per share.
Based on the midpoint of expected EBITDA, the purchase price reflects a valuation multiple of around 5.5 times, which falls to roughly 4.8 times when anticipated tax advantages are taken into account. The asset-based structure of the transaction is expected to yield tax benefits with a net present value of approximately $15 million.
More broadly, B&G Foods has been focused on strengthening its underlying business through portfolio simplification, operational efficiencies and disciplined capital allocation. Management continues to prioritize improving margins, enhancing cash flow stability and reducing balance sheet risk through ongoing cost initiatives and divestitures. These efforts are intended to create a more focused, less complex organization with greater flexibility to pursue selective growth opportunities over time.
B&G Foods’ Zacks Rank & Share Price Performance
Shares of this Zacks Rank #3 (Hold) company have lost 1.1% over the past month, outperforming the industry’s decline of 2.9%. However, BGS underperformed the broader Consumer Staples sector and the S&P 500, which gained 2.2% and 2.3%, respectively, over the same period.
BGS Stock's Past Month Performance
Image Source: Zacks Investment Research
Is BGS a Value Play Stock?
B&G Foods currently trades at a forward 12-month P/E ratio of 8.98, which is down from the industry average of 14.83 and notably below the sector average of 16.87. This valuation positions the stock at a modest discount relative to both its direct peers and the broader consumer staples sector.
BGS P/E Ratio (Forward 12 Months)
Image Source: Zacks Investment Research
Stocks to Consider
United Natural Foods, Inc. (UNFI - Free Report) distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 1.4% and 197.2%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 52.1%, on average.
Mama's Creations, Inc. (MAMA - Free Report) manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA sports a Zacks Rank of 1. Mama's Creations delivered a trailing four-quarter earnings surprise of 133.3%, on average.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 39.9% and 44.4%, respectively, from the year-ago figures.
McCormick & Company, Incorporated (MKC - Free Report) manufactures, markets and distributes spices, seasoning mixes, condiments and other flavorful products to the food industry. It holds a Zacks Rank #2 (Buy) at present. McCormick delivered a trailing four-quarter earnings surprise of 2.2%, on average.
The Zacks Consensus Estimate for McCormick’s current fiscal-year sales and earnings implies growth of 1.6% and 2.4%, respectively, from the year-ago figures.