General Mills Advances Accelerate Strategy and Expands Pet Food Portfolio with Acquisition of Edgard & Cooper

Rhea-AI Summary

General Mills (NYSE: GIS) has completed the acquisition of Edgard & Cooper, a premium pet food brand in Europe. This move aligns with the company's Accelerate strategy to drive growth and shareholder returns. Edgard & Cooper, founded in 2016, is a rapidly growing brand with estimated 2023 sales exceeding €100 million. The acquisition strengthens General Mills' position in the pet food market and emphasizes sustainability.

Positive

• Acquisition of Edgard & Cooper expands General Mills' portfolio in the pet food market, enhancing its growth potential.

• Edgard & Cooper is a well-established and fast-growing brand with estimated 2023 sales of over €100 million, providing a strong revenue stream.

• General Mills' Accelerate strategy is further advanced through this acquisition, demonstrating the company's commitment to sustainable and profitable growth.

Negative

• Potential integration challenges may arise as Edgard & Cooper becomes a separate operating unit within General Mills, impacting operational efficiency.

• The success of the acquisition hinges on effectively leveraging General Mills' marketing and supply chain expertise to accelerate Edgard & Cooper's growth.

Insights

Market Research Analyst

General Mills' acquisition of Edgard & Cooper aligns with a broader industry trend where major food corporations are expanding their presence in the lucrative pet food sector. Evaluating this move requires considering the growth potential of the premium pet food market, which has been increasing due to the humanization of pets and rising disposable incomes. Edgard & Cooper’s positioning in this segment suggests General Mills is strategically targeting a high-margin area, which could boost their portfolio diversity and resilience against market fluctuations in its traditional segments.

Financial Analyst

The acquisition’s financing through cash on hand indicates General Mills’ strong liquidity position, potentially reducing the risks associated with debt financing. With Edgard & Cooper's estimated 2023 retail sales surpassing €100 million, this deal could offer a significant revenue stream for General Mills' International segment. It's essential to observe the transaction's multiples compared to industry averages and the immediate financial performance post-acquisition to assess the accuracy of the investment decision and its impact on shareholder value. Increased earnings visibility and potential economies of scale are aspects to monitor in upcoming financial disclosures.

Sustainability Analyst

Edgard & Cooper’s emphasis on sustainability and natural pet food products could resonate with the growing consumer demand for environmentally responsible brands. This move may enhance General Mills’ brand perception and meet investor expectations around Environmental, Social and Governance (ESG) criteria. However, it will be important to track how General Mills integrates these practices into its broader operations and whether it can maintain Edgard & Cooper's sustainability commitments at scale without diluting the brand’s value proposition.

MINNEAPOLIS--(BUSINESS WIRE)-- General Mills (NYSE: GIS) today announced it has completed the acquisition of Edgard & Cooper, one of Europe’s leading independent premium pet food brands. With this transaction, the company further advances its Accelerate strategy, including the prioritization of its core markets, global platforms and local gem brands to drive sustainable, profitable growth and top-tier shareholder returns over the long term.

General Mills today announced it has completed the acquisition of Edgard & Cooper, one of Europe’s leading independent premium pet food brands. Established in 2016, Edgard & Cooper is one of the fastest-growing and most-recognized independent pet food companies in Europe, with estimated 2023 retail sales of more than €100 million across 13 markets. With this transaction, General Mills further advances its Accelerate strategy, including the prioritization of its core markets, global platforms and local gem brands to drive sustainable, profitable growth and top-tier shareholder returns over the long term. (Photo: Business Wire)

“Edgard & Cooper is at the intersection of our Accelerate strategy's core markets and global platforms," said Jon Nudi, group president, Pet, International and North America Foodservice, General Mills. "We’re thrilled to welcome the Edgard & Cooper team to the General Mills family, and we look forward to partnering together to advance their mission to revolutionize premium, natural pet food.”

Established in 2016, Edgard & Cooper is one of the fastest-growing and most-recognized independent pet food companies in Europe, with estimated 2023 retail sales of more than €100 million across 13 markets. With omnichannel distribution capabilities and a commitment to sustainability, the brand is delivering high-quality pet food to dogs and cats across Europe while reducing its impact on the planet. Headquartered in Kortrijk, Belgium, Edgard & Cooper will be a separate operating unit led by its three founders, Koen Bostoen, Louis Chalabi and Jürgen Degrande, with its financial results consolidated into General Mills’ International segment.

“We’re excited to join Team General Mills and continue doing what Edgard & Cooper is passionate about — making better dog and cat food with real ingredients that pets love and pet owners feel good about,” said Koen Bostoen, founder, Edgard & Cooper. “Combining our brand’s natural positioning and commercial capabilities with General Mills’ marketing and supply chain expertise, we’re ready to accelerate Edgard & Cooper’s growth.”

General Mills will fund the acquisition with cash on hand.

Raymond James & Associates Inc. acted as General Mills’ lead financial advisor in this transaction. White & Case LLP served as legal advisor. Morgan Stanley & Co International plc served as exclusive financial advisor to Edgard & Cooper, and Linklaters LLP served as legal advisor.

About General Mills

General Mills makes food the world loves. The company is guided by its Accelerate strategy to drive shareholder value by boldly building its brands, relentlessly innovating, unleashing its scale and standing for good. Its portfolio of beloved brands includes household names such as Cheerios, Nature Valley, Blue Buffalo, Häagen-Dazs, Old El Paso, Pillsbury, Betty Crocker, Yoplait, Totino’s, Annie’s, Wanchai Ferry, Yoki and more. Headquartered in Minneapolis, Minnesota, USA, General Mills generated fiscal 2023 net sales of U.S. $20.1 billion. In addition, the company’s share of non-consolidated joint venture net sales totaled U.S. $1.0 billion.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240429809015/en/

(Investors) Jeff Siemon: +1-763-764-2301

(Media) Chelcy Walker: +1-763-764-6364

Source: General Mills

FAQ

What did General Mills acquire?

General Mills acquired Edgard & Cooper, a premium pet food brand in Europe.

When was Edgard & Cooper founded?

Edgard & Cooper was founded in 2016.

What are the estimated 2023 sales of Edgard & Cooper?

Edgard & Cooper is projected to have retail sales exceeding €100 million in 2023.

Where is Edgard & Cooper headquartered?

Edgard & Cooper is headquartered in Kortrijk, Belgium.

How will General Mills fund the acquisition?

General Mills will fund the acquisition with cash on hand.