Bob Evans Farms Inc.
announced a pair of acquisitions Tuesday along with an executive change meant to focus the company on grocery store sales, and shares jumped 10% in late trading. Bob Evans said that it would sell its chain of Bob Evans Restaurants to private equity firm Golden Gate Capital for $565 million plus the transfer of certain liabilities, with the cash used to pay down debt and issue a special $7.50-per-share dividend to stockholders. Bob Evans also said it has agreed to purchase Pinelands Farm Potato Company for $115 million financed with debt, beefing up its offerings of refrigerated side dishes for home consumption. Current Chief Executive Saed Mohseni will remain in charge of the restaurant division after the sale, while the president of the Bob Evans foods division, former co-CEO Mike Townsley, will take over the CEO role for Bob Evans Farms. Mohseni called the moves, made after a board review of the company’s business, “a major step in our strategic transformation.” “The sale of Bob Evans Restaurants enables us to concentrate exclusively on BEF Foods, our fastest growing and most profitable segment,” Mohseni said in the announcement. Bob Evans also reaffirmed its forecast of full fiscal-year adjusted earnings at $2.15 to $2.30 a share, established guidance for 2018 fiscal year revenue at $470 million, and said it would target continued quarterly dividends of 34 cents a share. Shares, which closed with a 0.4% loss at $47.95, jumped to nearly $53 in late trading.