General Mills Inc., the maker of Cheerios, Bisquick and Yoplait, is acquiring Berkeley, California-based Annie’s Inc. for about $820 million, gaining a popular lineup of natural and organic foods.
The deal, slated to close this year, will pair Annie’s products with General Mills’ existing organic foods, including the Cascadian Farm and Food Should Taste Good brands. Large packaged-food companies are increasingly looking to natural products to help spur growth in a sluggish industry. Annie’s is known for its bunny-shaped crackers – the company’s stock-exchange ticker is BNNY – as well as organic macaroni and cheese. The deal should start boosting General Mills’ profit within the first year, excluding transaction expenses, the company said.
“Annie’s competes in a number of attractive food categories, with particular strength in convenient meals and snacks – two of General Mills’ priority platforms,” Jeff Harmening, chief operating officer of the Minneapolis-based company’s US retail business, said in the statement. Annie’s shares climbed as much as 40 per cent to $46.97 in late trading. Annie’s posted sales of $204 million in its most recent fiscal year. That compares with about $330 million in revenue for General Mills’ organic-product division, which also includes Muir Glen tomatoes and Larabar energy bars.
Rabbit Mascot
Annie’s was co-founded in 1989 by Annie Withey, aiming to provide natural foods for moms to feed their families. She initially built the business by word of mouth. Withey, whose rabbit Bernie inspired the company’s bunny mascot, still writes the personal letters printed on the product boxes and “remains the inspiration and corporate conscience” for the company’s products, according to its website.
Annie’s Chief Executive Officer John Foraker said on Monday that the General Mills takeover will help boost distribution of the company’s products while preserving its mission. “Annie’s has proven you can indeed do well by doing good,” he said in a note to employees. “These values and the magic of the Annie’s brand are key elements of our success – and something General Mills admires.”
Bloomberg News, edited by ESM
