Premium Brands Holdings snaps up two protein companies to expand outreach

CANADA – Canadian specialty food manufacturing and distribution company, Premium Brands Holdings, has expanded its capacity and market reach of the cooked meats platform through the acquisition of two protein companies.

Announcing results for the three months to 25 June and the fiscal year guidance, Premium Brands revealed it has snapped up Ohio-based cooked protein business King’s Command Foods.

The company has also increased its interest in deli meats producer Golden Valley Farms from 50% to 100%.

President and CEO George Paleologou disclosed that the two deals amounted to a transaction value of CAD86.5million (US$67.3m).

King’s Command is said to add capacity and market reach to the company’s cooked meats platform.

In addition, the purchasing of the other 50% of Golden Valley that the specialty food manufacturer did not previously own, enables it to seamlessly expand its dry curing capacity.

Paleologou added that the acquisitions will help position the company appropriately to exceed its 2023 objective of CAD6 billion in sales and CAD 600 million in adjusted EBITDA (US$4.7bn and US$469.94m respectively).

The Richmond-based company aims to achieve its “longer-term goal of being one of North America’s leading specialty foods companies”.

Premium Brands Holdings reports 23.1% rise in Q2 revenue

Meanwhile, the owner of brands such as Harvest Meats, Freybe, and Expresco reported a 23.1% increase in the second quarter revenue totaling CAD1.5billion (US$ 1.17bn).

Finance chief Will Kalutycz explained revenue was boosted by selling-price inflation amounting to CAD134.4m (US$105.27m) during the second quarter, with a total of CAD490m(US$383.79m) taken in pricing over the past four quarters.

Premium Brands kept its outlook for the metric at CAD510-530million during this period when the company continues to face significant cost inflation from the first quarter through most of the second quarter. (CAD1:US$0.78)

For the first half, Premium Brands’ sales revenue climbed 23.6% to CAD2.8bn (US$2.19bn), while adjusted EBITDA rose 16.3% to CAD226.6million (US$177.48m).

Kalutycz explained that the company has seen a break in chicken commodity, one he described as the “most challenging” and which is the most sensitive input cost out of the other protein components.

He added that the break seems to be continuing and could be a positive upside in the outlook for 2022 if that trend continues, which has become good news to the business that has been acquisition hungry in recent years.

According to Kalutycz, acquisitions accounted for CAD114.1m (US$ 89.37m) of the company’s growth.

The weaker Canadian dollar relative to the US dollar also resulted in the favorable translation of US operations, contributing CAD20.1million (US$ 15.74m) to its growth and organic volume growth contributed CAD16.6million (US$13m).

After that incredible financial results posting, Premium Brands raised its sales revenue guidance, expecting to post full-year net sales of CAD5.75bn to CAD 6.00bn, compared to a prior estimate of CAD5.6-5.85bn.

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