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Analyst Blog

Packaged food company, B&G Foods, Inc. (BGS - Snapshot Report) recently announced the pricing of senior notes worth $700 million due 2021. The notes carry an interest rate of 4.625%. The offering process is expected to complete on Jun 4, 2013.

B&G intends to use the net proceeds to purchase senior notes worth $248.5 million due 2018. The company may also redeem other existing senior notes worth $222.2 million and revolving loans of $40.0 million. The remaining net proceeds would be used to meet other general corporate expenses, which may include repayment of debt and acquisition of assets.  

B&G Foods often acquires small brands that have strong margins and generate less than $100 million in sales. Most of the time, these are smaller brands from large food companies, which have limited competition. B&G Foods’ investments in these brands help to generate huge free cash flow and ensure profitability in the long run. 

Very recently, B&G acquired the TrueNorth brand from DeMet’s Candy Company to strengthen its snack portfolio. TrueNorth are bite sized nut clusters made of roasted nuts, with a taste of sea salt and sweetness.  B&G Foods’ snacks portfolio also includes New York Style, Old London, JJ Flats and Devonsheer brands which were acquired in Oct 2013.

B&G Foods carries a Zacks Rank #2 (Buy).

Some other consumer staple stocks that are worth a look include Flower Foods Inc. (FLO - Snapshot Report) carrying  a Zacks Rank #1 (Strong Buy) and H. J. Heinz Company and J&J Snack Foods Corp. (JJSF - Snapshot Report) holding a Zacks Rank #2 (Buy).