Q: Hi 5i, can you please provide your opinion on PBH's acquisition of Stampede Culinary Partners, Inc.? Thx.
5i Research Answer:
The $662M Stampede deal is fairly aggressive, but looks good overall. It expands the company's presence in the US foodservice sector, but more importantly adds much needed capacity for growth. It will add about $1.8B C$ to sales. It is immediately accretive to earnings (mid single digit percentage), and this will ramp up more as synergies are realized. PBH is maintaining its balance sheet integrity with a $430M equity issue in tandem with the deal. Overall, a big bite, but we think makes sense, and the purchase price fairly reasonable.