Boulder Brands buys EVOL for $48 million

BOULDER — Boulder Brands Inc. (Nasdaq: BDBD) bought Phil’s Fresh Foods LLC, owner of EVOL Foods, for $48 million in December.

The Boulder-based food brand company said it paid cash for Boulder-based EVOL Foods, whose signature products are frozen burritos and other products sold in grocery stores’ freezer aisles. After cash tax benefits, the net cash price of the transaction is expected to be about $40 million, according to a Boulder Brands press statement.

EVOL was owned by founder Phil Anson and a group of investors, including Alliance Consumer Growth in New York and investors related to Revelry Brands and Spier Capital Management, two investment firms in Boulder, according to the press statement.

EVOL’s net sales in 2013 were expected to grow to $17 million, which would represent a 70 percent increase from the year before. Boulder Brands expects EVOL’s 2014 net sales to be about $25 million.

Moody’s Investor Service said the acquisition of EVOL will weaken credit metrics in the near term for Boulder Brands because EVOL is not expected to be a meaningful source of earnings over the next 12 to 18 months.

“While this acquisition is relatively small in size, we believe it to have significant potential for Boulder Brands,” Stephen Hughes, chairman and chief executive of Boulder Brands, said in the press statement. “EVOL is a category-elastic brand in an exciting segment that will further accelerate our growth rate and diversify our mix to high-growth natural brands.”
Boulder Brands plans to grow EVOL product sales in connection with its own Udi’s brand of gluten-free frozen pizzas, burritos and entrees, Hughes said. Phil Anson and 24 people from the EVOL team will join Boulder Brands, and the company will stay in Boulder, Anson said in the press statement.

“This exciting change of control will offer us the ability to further our mission and catapult growth of the EVOL brand as we continue to redefine frozen convenience food and lead a sea change in natural and organic frozen category growth,” Anson said in the press statement.

Boulder Brands financed the purchase through a recently expanded senior secured-term loan credit facility, a revolving credit line and cash on hand, according to the press statement. Boulder Brands granted option awards of 660,000 shares of its stock to EVOL Foods employees as an inducement to join, according to the press statement.

Boulder Brands was advised by Fried, Frank, Harris, Shriver & Jacobson LLP in New York. EVOL Foods was advised by Houlihan Lokey and Robinson & Cole LLP.

Boulder Brands’ other brands include Glutino, which makes gluten-free products; Earth Balance and Smart Balance spreads; and Level Life, which makes products targeted at diabetics. EVOL is the word “love” spelled backwards. EVOL Foods’ tagline is “love what you eat.”


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