In the frantic whirl of earnings season, Heinz
Nancy's is best known in the U.S. for its offerings at warehouse clubs Costco
Is it important to investors that Heinz acquired a company with $64 million in sales? Particularly when you consider that the $64 million represents less than 1% of the total sales at Heinz in the last year? I'd argue that it's important for a couple of reasons.
Primarily it's important because Nancy's fits the existing business at Heinz, a Motley Fool Income Investor selection. The company is not adding a widgets business, but another prepackaged foods business that fits in alongside a number of other frozen foods at Heinz. This means Heinz can leverage its clout for the Nancy's products in the freezer aisle in Kroger
The other reason I like the acquisition is that Heinz expects it to add to earnings in the first year, which means the company is paying a fair price.
The Nancy's acquisition is by no means a huge game changer for Heinz, but more often than not it's the big acquisitions that get a company into trouble, because they're more difficult to digest operationally and culturally, and they generally come with a steep price tag.
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