Premium Brands to acquire Stampede Culinary

Executive Summary

• Premium Brands Holdings Corp. has entered into a definitive agreement to acquire Stampede Culinary Partners Inc. for approximately $662.5 million (U.S.), consisting of cash and equity, with an additional earnout potential of up to $100 million.
• Concurrently, the company is raising approximately $880 million (U.S.) through a bought-deal public offering of subscription receipts and convertible debentures, plus a concurrent private placement of subscription receipts.
• The transaction is expected to be immediately accretive to adjusted EPS and aims to deleverage the balance sheet, with pro forma debt-to-EBITDA ratios expected to decrease by approximately 0.4 turns.

Key Details

• Acquisition Consideration:
  • Total base purchase price: ~$662.5 million (U.S.).
  • Cash component: $512.5 million (U.S.).
  • Equity component: $150.0 million (U.S.) in common shares (~2.2 million shares).
  • Earnout: Up to $100.0 million (U.S.) based on profitability targets over two fiscal years post-closing.
  • Valuation Multiple: ~9.7x estimated fiscal 2025 adjusted EBITDA (7.5x after synergies; 8.4x normalized for beef cost inflation).
• Financing Structure:
  • Public Offering:
    • Subscription Receipts: 2,872,400 units at $97.50/unit for gross proceeds of ~$280 million.
    • Convertible Debentures: $150 million aggregate principal amount at $1,000/debenture for gross proceeds of ~$430 million.
    • Overallotment Option: Up to 430,860 subscription receipts and $22.5 million in debentures.
  • Private Placement:
    • Subscription Receipts: 1,743,600 units at $97.50/unit for gross proceeds of ~$170 million.
    • Hold Period: 4 months + 1 day.
  • Total Gross Proceeds: ~$880 million (U.S.).
  • Use of Proceeds: Partially finance the cash purchase price of the acquisition and cover offering/acquisition expenses. Remaining cash balance to be financed via revolving credit facility.
• Debenture Terms:
  • Interest Rate: 5.50% per annum, payable semi-annually.
  • Maturity: December 31, 2032.
  • Conversion Price: $156 per common share (6.4103 shares per $1,000 debenture).
• Financial Impact & Synergies:
  • Accretion: Mid-single-digit percentage accretion to adjusted EPS in the first full year; high-single-digit percentage accretion after synergies.
  • Debt Metrics: Pro forma senior financed debt to adjusted EBITDA of 3.0x; pro forma total financed debt to adjusted EBITDA of 3.9x.
  • Target: Total financed debt to adjusted EBITDA ratio of 3.0x or lower by 2027.
• Strategic Rationale:
  • Strengthens presence in the U.S. foodservice channel (currently focused on retail/club).
  • Adds sous vide cooking capacity to complement existing flame-grilled technology.
  • Provides access to significant unused production capacity.
• Closing Conditions:
  • Customary conditions including Hart-Scott-Rodino Antitrust Improvements Act approval.
  • Expected closing: End of January 2026.
  • Public offering closing: On or about December 17, 2025.

Notable Quotes

• George Paleologou, President and CEO, Premium Brands: "The acquisition of Stampede will further accelerate our growth in this market by strengthening our presence in the U.S. foodservice channel... enhancing our production capabilities through the addition of sous vide cooking capacity... and providing us with access to significant unused production capacity."
• George Paleologou, President and CEO, Premium Brands: "We have taken a conservative approach, and have used the acquisition and the related financing to accelerate the deleveraging of our balance sheet with our senior funded debt and total funded debt to adjusted EBITDA ratios decreasing by approximately 0.4 turns on a pro forma basis."
• Brock Furlong, CEO, Stampede: "We see tremendous opportunities to sell many of the exciting, premium products produced by the Premium Brands ecosystem to our diverse portfolio of foodservice and emergent retail customers."