Atkins Nutritional – Goes public in merger with a blank check company

Atkins Nutritionals Holdings, a packaged food company owned by Roark Capital Group, was acquired in a deal worth $730 million by Conyers Park Acquisition Corp (NasdaqCM: CPAA) on April 10, 2017. The Selling shareholders will receive $730.1 million in total consideration through a combination of $653 million in cash ($402.5 million of cash held in Buyer’s trust account, $150 new net debt, and $100 million common stock private placement), and rollover stock (10.25 million shares of common stock of newly founded ‘The Simply Good Foods Company’ valued at $10.00 per share). In addition, Conyers Park to enter into a tax sharing agreement with selling shareholders as part of the transaction.

 With $380 million and $64 million in adjusted revenues and adjusted EBITDA, respectively, Atkins was acquired for a 1.92 revenue multiple and 11.41 EBITDA multiple. On closing, through a series of mergers, Atkins and Conyers Park will combine under a new holding company, The Simply Good Foods Company, which will list on the NASDAQ stock exchange under the symbol SMPL.

The proposed stock ownership of Simply Good Foods includes the investment in Conyers Park’s initial public offering (57%), the selling equity owners of Atkins (15%), Conyers Park Founders (14%) and the common stock private placement investment (14%). Jim Kilts and Dave West, executive founders of Conyers Park, will serve as Chairman and Executive Vice Chairman of Simply Good Foods, respectively. Brian Ratzan, also an executive founder of Conyers Park, will become a director of Simply Good Foods. Joseph Scalzo, current Chief Executive Officer of Atkins, will continue in that role and lead the new company.

The Simple Good Foods Company will have an anticipated initial enterprise value of approximately $856 million, or 11.6x Atkins’ estimated 2017 pro forma EBITDA of $74 million.

Atkins Nutritionals, founded by Robert Atkins who promoted the low-carb, low-sugar, protein-rich diet, manufacturers branded food products and supplements including nutrition bars, meal kits, frozen meals, shakes, and snack treats. Founded in 1989, Atkins Nutritionals was once owned by Parthenon Capital/Goldman Sachs in 2003, which after the founder’s death and waning popularity resulted in bankruptcy filing in 2005. After emerging from bankruptcy, North Castle Partners acquired Atkins in 2007, and then by Roark Capital Group in 2010 for $301 million.

In July 2016, Conyers Park Acquisition Corp, led by James Kilts, David West, and Brian Ratzan, was listed on Nasdaq and priced at $10.00 per unit. Each unit is one share and 1/3 warrant, where each whole warrant enables purchase of one share at $11.50 per share. Conyers Park is a blank check company formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

The transaction is expected to close in June 2017. As of April 25, 2017, FTC granted early termination of antitrust approval waiting period for the transaction.

About PierCap Partners:

We are a mergers and acquisitions (M&A) investment bank based in San Diego. M&A is our singular focus. Whether you are thinking of acquiring / selling a business, or taking some chips off the table, we run a well-disciplined process that secures best possible value, minimizes disruption and manages the delicate balance and spirit of collaboration. With over $2 billion in aggregate transaction value and 35+ years of combined experience, our leaders bring operational expertise, an owner’s perspective, and Wall Street solutions to you. Find out more about our focus, services and experience.