News
Acquisition · Consumer Goods · Nutritional Snacking · Protein
The Simply Good Foods Company (Nasdaq: SMPL) acquired Quest Nutrition, LLC for $1.0 billion in cash, or approximately $870 million net of tax benefits, on August 21, 2019, creating a leading nutritional snacking company with combined estimated net sales exceeding $800 million.
This strategic acquisition pairs Simply Good Foods' Atkins brand with Quest's product portfolio, expanding the company's offerings and diversifying its consumer base, particularly appealing to the 18-44 age demographic. Quest, which reported estimated net sales of about $345 million and Adjusted EBITDA of $50 million for the twelve months ended December 31, 2019, as provided by Quest management, brings a fast-growing, high-protein, low-sugar product line.
Simply Good Foods expects to achieve $20 million in cost synergies over three years by leveraging efficiencies of scale and enhancing distribution channels. Quest benefits from Simply Good Foods' expertise in FDM (food/drug/mass) channels and broad reach media, while Simply Good Foods gains from Quest's effectiveness in e-commerce and social platforms.
The transaction is expected to be accretive to cash EPS in year one and financed through $225 million cash on hand, committed financing, and anticipated equity issuance, targeting a net debt to Adjusted EBITDA multiple of 4.0x or less by fiscal year-end August 2020.
