Simply Good Foods to acquire Quest Nutrition for $1B in cash
The Simply Good Foods Company and Quest Nutrition announced that the companies have entered into a definitive agreement under which Simply Good Foods will acquire Quest for $1.0B in cash, or approximately $870M net of tax benefits, on a cash-free and debt-free basis. The transaction is structured as the purchase by a subsidiary of Simply Good Foods of 100% of the equity of each of Voyage Holdings and VMG Quest Blocker from the founders of Quest and other equity holders of the target. Simply Good Foods intends to finance the transaction by using approximately $225M of cash on its balance sheet as well as committed financing from Barclays, Credit Suisse and Goldman Sachs. The company also anticipates issuing equity and, given the expected solid cash flow generation of the combined businesses, anticipates a net debt to adjusted EBITDA multiple of 4.0x or less by fiscal year-end August 2020. The transaction has been approved with unanimous support by the board of Simply Good Foods, its purchasing subsidiary and by the governing bodies of the target and is expected to close by the end of 2019, subject to satisfaction of customary closing conditions and receipt of regulatory clearance.