Image source: B&G Foods.

What: Shares of food manufacturer and distributor B&G Foods (NYSE:BGS) soared as much as 14.3% higher on Thursday. The company is acquiring frozen foods and canned vegetable brands Green Giant and Le Sueur from sector rival General Mills (NYSE:GIS). Both stocks rose on the news.

So what: B&G is paying $765 million in cash for these history-rich brands, and the deal is expected to close in the fourth quarter of 2015. Financing comes from a batch of revolving loans on top of B&G's revolving credit lines, managed by a consortium of three major banks.

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Now what: B&G expects this acquisition to add $550 million of net sales after a brief transitional period, alongside $0.60 of additional earnings per share. To put these numbers into perspective, B&G's sales over the last four quarters stand at $858 million, yielding earnings of $0.83 per share. This is a deal of game-changing proportions.

"The acquisition marks our entry into the frozen food category, which we believe will open many future growth opportunities," said B&G CEO Bob Cantwell in a press statement.

This is B&G's sixth brand buyout since 2013, and the 29th of an acquisition spree that started in 1997. Buyouts are an important growth strategy for this company, and B&G hopes to strengthen Green Giant's market position further via targeted marketing campaigns and cross-selling synergies with B&G's existing brands.

General Mills will hold on to Green Giant's operations in Europe and a handful of other overseas markets, run under a paid license from B&G. For the parent company of household brands such as Cheerios, Pillsbury, Betty Crocker, and Haagen-Dazs, the sale is a focusing move. General Mills wants to double down on its greatest growth properties, and Green Giant didn't cut the mustard. Those $550 million of annual sales that hold so much promise for B&G only add up to 3.1% of the larger company's trailing sales.

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