Nomad Buys Goodfella's Pizza for $275 Million After Deal Hiatus

(Bloomberg) -- Nomad Foods Ltd. agreed to buy Goodfella’s Pizza for about 225 million euros ($275 million), ending the company’s dealmaking lull as it pushes ahead in consolidating frozen-food businesses.

U.K-based Nomad, which began as an acquisition vehicle backed by entrepreneurs Martin E. Franklin and Noam Gottesman, is buying the frozen-pizza maker in an all-cash deal from a subsidiary of Boparan Holdings Ltd, according to a statement Wednesday. Nomad is adding Goodfella’s to a list of brands including Birds Eye, Findus and Iglo after more than two years without a deal.

The Goodfella’s deal is expected to contribute about 8 euro cents to 9 euro cents to Nomad’s adjusted earnings per share within two years of closing, the company said.

Nomad also updated its 2017 guidance. Last year’s adjusted earnings before interest, taxes, depreciation and amortization are expected to be about 328 million euros, up from an earlier projection of 325 million euros to 327 million euros, the company said. Organic revenue growth should be about 5 percent for the fourth quarter, instead of 3 percent as previously expected, the company said.

The Goodfella’s deal advances Nomad’s turnaround efforts. The company’s shares sank late in 2015 and into 2016 as it worked through challenges at Iglo Foods Holdings Ltd. after buying it for 2.6 billion euros, as well as at Findus Group’s continental European businesses, which it bought for about 500 million pounds ($690 million). The stock has bounced back from its low of $6.49 a share in February 2016, rising 150 percent as management refocused its brands back on core products such as fish fingers, peas and spinach.

“The focus on a limited number of categories is something we’re going to keep,” Nomad Chief Executive Officer Stefan Descheemaeker said in a phone interview, emphasizing a focus on fundamentals on a country-by-country basis. “We have learned the lessons from the past and are moving from defense to offense.”

The deal, which gives Nomad its first significant foothold in the frozen pizza category, is expected to close this quarter.

2018 is already shaping up as active year for food industry deals.

Goldman Sachs Group Inc.’s private equity arm and Vestar Capital Partners are exploring a sale of U.S. food manufacturer Hearthside Food Solutions LLC, people familiar with the matter said last week. Also last week, Post Holdings Inc. said it will explore strategic alternatives for its private brands businesses, which produces goods such as nut butter and granola products.

On Tuesday, Nestle SA announced that it agreed to sell its U.S. confectionery business to Italian Nutella maker Ferrero SpA for $2.8 billion.

To contact the reporters on this story: Melissa Mittelman in New York at mmittelman@bloomberg.net, Ed Hammond in New York at ehammond12@bloomberg.net.

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Michael Hytha, Ben Scent

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