General Mills To Acquire Blue Buffalo For $40.00/shr - Quick Facts

(RTTNews) - General Mills, Inc. (GIS) and Blue Buffalo Pet Products, Inc. (BUFF) announced a definitive agreement under which General Mills will acquire Blue Buffalo for $40.00 per share in cash, representing an enterprise value of approximately $8.0 billion. Blue Buffalo is a major pet food company making natural foods and treats for dogs and cats under the BLUE brand, which includes BLUE Life Protection Formula, BLUE Wilderness, BLUE Basics, BLUE Freedom and BLUE Natural Veterinary Diet.

The company said the transaction will be immediately accretive to General Mills net sales growth and operating margin profile, and is expected to be neutral to cash EPS in fiscal 2019 and accretive in fiscal 2020.

General Mills expects to finance the transaction with a combination of debt, cash on hand and approximately $1.0 billion in equity. Following the transaction, General Mills' pro forma net debt-to-EBITDA ratio is expected to be approximately 4.2x. General Mills said the company is committed to maintaining an investment grade rating and expects to deleverage to approximately 3.5x by the end of fiscal 2020. The company expects to maintain its $0.49/share quarterly dividend and suspend its current share repurchase program while it prioritizes achieving its leverage target.