Premium Brands Holdings Corporation Announces the Acquisition of Stampede Culinary Partners and Concurrent Equity and Convertible Debenture Offerings
Executive Summary
- Premium Brands Holdings Corp. entered a definitive agreement to acquire 100% of Stampede Culinary Partners for an aggregate purchase price of ~US$662.5 million (US$512.5 m cash + US$150 m common shares) plus a potential earn‑out of up to US$100 m.
- The acquisition is expected to be immediately accretive to adjusted EPS, delivering mid‑single‑digit percentage earnings accretion in the first full year (high‑single‑digit after synergies).
- Concurrently, Premium Brands announced a “bought‑deal” public offering of 2,872,400 subscription receipts at $97.50 each ($280 m gross) and $150 m of 5.50% convertible unsecured subordinated debentures at $1,000 each ($430 m gross). Net proceeds will partially fund the cash portion of the acquisition and reduce existing indebtedness.
Key Details
- Acquisition Structure
- Cash consideration: US$512.5 million.
- Equity consideration: US$150 million (≈2.2 million Premium Brands common shares).
- Earn‑out: Up to US$100 million based on Stampede’s profitability over the two fiscal years post‑closing.
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Purchase price multiple: ~9.7× FY2025 Adjusted EBITDA (7.5× after synergies; 8.4× normalised for beef cost inflation).
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Closing Conditions & Timeline
- Subject to customary closing conditions, including HSR Act approvals.
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Expected closing by end‑January 2026.
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Financing – Public Offering (Bought Deal)
- Subscription Receipts: 2,872,400 units @ $97.50 each → gross proceeds ≈ $280 million.
- Convertible Debentures: $150 million principal amount, 5.50% coupon, $1,000 per debenture → gross proceeds ≈ $430 million.
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Over‑Allotment Options: Up to 430,860 additional subscription receipts and up to $22.5 million of extra debentures, exercisable within 30 days post‑closing.
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Concurrent Private Placement
- 1,743,600 placement subscription receipts @ $97.50 each → gross proceeds ≈ $170 million.
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Held for four months plus one day; same terms as public receipts otherwise.
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Use of Proceeds
- Subscription receipt net proceeds: partially fund cash purchase price and cover offering expenses.
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Debenture net proceeds: initially reduce senior revolving credit facility indebtedness, increasing available borrowing capacity for the acquisition and related costs.
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Debt Ratios (Pro Forma)
- Senior funded debt/Adjusted EBITDA → ~3.0 × post‑acquisition.
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Total funded debt/Adjusted EBITDA → ~3.9 × post‑acquisition; target ≤3.0 × by 2027.
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Accretion & Synergies
- Immediate EPS accretion: mid‑single‑digit % (pre‑synergy).
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Post‑synergy EPS accretion: high‑single‑digit %.
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Conversion Terms for Debentures
- Conversion price: $156.00 per common share (6.4103 shares per $1,000 principal).
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Maturity: December 31 2032; interest payable semi‑annually.
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Closing Dates
- Public offering expected to close ~December 17 2025.
- Private placement closes concurrent with public offering.
Notable Quotes
- “The acquisition of Stampede will further accelerate our growth in this market… strengthening our presence in the U.S. foodservice channel…” – George Paleologou, President & CEO
- “We are very excited about joining the Premium Brands family and look forward to leveraging its resources…” – Brock Furlong, CEO of Stampede