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Bob Evans Selling Chain, Buying Potato Business

Image: Bob Evans Selling Chain, Buying Potato Business

Bob Evans announced plans to sell its restaurant chain to a private equity firm for $565 million and aquire Pineland Farms Potato Co. in a $115 million deal. (Screengrab)

By    |   Thursday, 26 Jan 2017 09:12 AM

Bob Evans is selling its restaurant chain for over $560 million while also acquiring another company for more than $100 million. The new deals will ultimately split the company into two separate businesses.

The 523-restaurant chain said Tuesday that Golden Gate Capital, a private equity firm, was set to buy Bob Evans for $565 million, according to Columbus Business First.

Bob Evans said it expects to make between $475 million and $485 million from the deal.

“This is an important time for our brand, our company and our team, and this partnership will provide Bob Evans Restaurants with the resources, knowledge and flexibility needed to drive our growth, while remaining true to the values of our founder, Bob Evans,” Bob Evans CEO Saed Mohseni said in a press release, according to Business First.

Bob Evans also announced plans to pay $115 million for Pineland Farms Potato Co. as the company plans to expand its BEF Foods division.

Bob Evans’ BEF Foods division has a lot invested in refrigerated side dishes, which can be bought at supermarkets across the country, according to USA Today.

The company said this new acquisition “provides capability to produce and sell diced and shredded potato products in both the retail and food service channels,” Business First noted.

The acquisition will also provide the company with another potato processing facility, a 900-acre potato farm and 55,000 more acres of annual potato production.

"We’ve evaluated this process for many months. What we concluded was: sell the most mature part of business, take the money and invest it in the part of company that is fastest growing and has the highest margin of profitability," Mohseni told Forbes. "The market perceived that to be a very positive step towards not only enhancing shareholder value but building two solid companies going forward."

Bob Evans’ shares grew nearly 21 percent just 24 hours after the deals were announced.

“Bob Evans Restaurants has made tremendous progress over the last few years as our teams have strived to upgrade every aspect of the guest experience,” Mohseni said, according to ABC 2 News. “We believe our talented restaurant teams, combined with Golden Gate Capital’s industry expertise and significant resources, positions Bob Evans Restaurants well for realizing its full potential.”

The deals are expected to be finalized by the end of April.

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Bob Evans is selling its restaurant chain for over $560 million while also acquiring another company for more than $100 million.
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2017-12-26
Thursday, 26 Jan 2017 09:12 AM
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