United Natural Foods (UNFI) to Acquire Haddon House, Cuts Outlook

Shares United Natural Foods Inc. (UNFI) were trading down -4.26 or -10.85 percent to $34.99 per share in Monday’s premarket after the company announced the acquisition of Haddon House Food Products. The company also released its preliminary results for second quarter sales and earnings. United Natural Foods stock closed at $39.25, up +0.87 or +2.27 percent in Friday’s regular trading session.



Founded in 1996 after the merger of two large regional natural food distributors, Cornucopia Natural Foods and Mountain People’s Warehouse, Providence, Rhode Island based United Natural Foods Inc. is a large distributor of organic and natural and specialty foods in the United States and Canada.
United Natural provides its retailer and manufacturing customers with marketing, merchandising and store support services. The company’s main customers include food co-ops, natural foods stores and supermarkets. United Natural Foods Inc. is the primary supplier of Whole Foods Markets (WFM) in the United States, Canada and over forty other countries.

Medford, New Jersey based Haddon House Food Products Inc. was founded in 1960 by the Anderson family. The company is a privately held wholesale food distributor specializing in ethnic, gourmet and organic products. The company supplies over 15,000 specialty products of several different brands such as Asian Gormet, Medford Farms and Twin Tree Gardens. The company has a multi channel customer base throughout the Eastern United States, which includes gourmet food stores, supermarkets and independently owned retailers.

The deal was announced in a separate release from Unified Natural Foods’ second quarter guidance, and is for the acquisition of all outstanding stock of Haddon House Food Products Inc., affiliated entities and some real estate in a cash transaction of approximately $217.5 million. The closing of the transaction is subject to the customary regulatory conditions and is expected to be finalized by the end of the company’s fourth fiscal quarter of 2016.

Steven Spinner, President and Chief Executive Officer of United Natural Foods Inc. said in the company’s press release that, “Haddon House has a unique product and service offering that we expect to play an important role in our ongoing strategy to build out UNFI's gourmet and ethnic product categories across the country.” Adding that, “This transaction will provide us with greater operating scale and resources to further develop our product and service offering as we work with the UNFI team to broaden our geographic reach and route to market across complementary and new customer bases.”

For the company’s fiscal second quarter ending on January 31st, 2016, United Natural said it anticipates adjusted earnings per share of $0.47 to $0.49 on net sales of approximately $2.05 billion. The analyst consensus was for expected earnings of $0.61 on revenue of $2.07 billion.

CEO Spinner stated in the company’s preliminary second quarter press release that, “Our updated results reflect the rapidly changing near term industry dynamics facing UNFI and its constituents. We have made significant progress in developing our fresh platform, e-commerce, brands and infrastructure. UNFIs second quarter preliminary results and our view of fiscal 2016 reflect our commitment to investing in growth throughout our organization while we continue to evaluate our cost structure and customer experience.” The company will release its full second quarter results on March 7th.

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Published on Feb 29, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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