Vernon frozen-food supplier Overhill Farms Inc. might soon be swallowed up by a larger Midwest frozen-food company, but its local manufacturing plant will stay open and most jobs will remain.
Bellisio Foods Inc. of Minneapolis announced last week that it had agreed to buy Overhill for $81 million in cash, or $5 a share. That’s a 15 percent premium over Overhill’s closing price of $4.36 the day before the deal was announced. After news of the deal, the stock shot up to nearly $5, making it one of the biggest gainers on the LABJ Index. (See page 58.)
Alexander Auerbach, the company’s spokesman, told the Business Journal that the Vernon manufacturing plant would remain open and that the company’s 700-person workforce would remain mostly intact.
“Overhill Farms will retain its name and corporate identity,” Auerbach said.
Auerbach also said Chief Executive James Rudis would remain with the company, although his exact title and role had not been announced by press time.
Overhill makes branded and private-label products for retail and institutional food service customers, including Panda Restaurant Group Inc. of Rosemead; Safeway Inc. of Pleasanton; and American Airlines Inc., a subsidiary of AMR Corp. of Fort Worth, Texas.
Bellisio is considered the nation’s third largest producer of frozen entrees; it was acquired in December 2011 by Centre Partners Management LLC, a private equity firm with offices in New York and Los Angeles.
Bellisio and Overhill teamed up two years ago to supply frozen meals under the restaurant brand Boston Market Corp. of Golden, Colo.
Last summer, amid a slump in the frozen-food market and a decline in its stock price, Overhill enlisted Minneapolis investment bank Piper Jaffray & Co. to explore options, including a sale.
Shareholder Lenny Dunn, a senior vice president at Freedom Investors Corp. in Brookfield, Wis., said the sale process took way too long and criticized management for dragging it out.
“This was an obvious choice from the beginning,” Dunn said. “If they had simply focused on closing the deal in the first couple months instead of dithering as the stock price fell, we could have had a sale price of $6 a share instead of $5 a share.”
Auerbach said Overhill management had to go through due diligence on all the options presented to the company, not just the potential for a sale to Bellisio.
