August 4, 2011 / 1:27 PM / 7 years ago

UPDATE 1-Premium Brands Q2 profit falls, to buy deli meat producer

* Q2 EPS C$0.24 vs C$0.30 year-ago

* Q2 rev rises 46 pct to C$183.8 mln

* To expand deli meat business with C$102.9 mln buy (Follows alerts)

Aug 4 (Reuters) - Specialty food maker Premium Brands Holdings Corp’s quarterly profit fell 15 percent hurt by high commodity input costs, and said it would expand its deli meat business by buying Piller Sausages & Delicatessens Ltd for C$102.9 million.

Premium Brands will pay C$73.7 million in cash and issues nearly 2 million shares. Based on the stocks’ closing of C$14.83 Wednesday on the Toronto Stock Exchange, the stock portion of the deal is about C$29.2 million.

Waterloo, Ontario-based Piller is owned by the Huber family and manufactures specialty European deli meats with annual sales of about C$180 million.

Premium Brands, which owns Grimm’s deli meat business, said the deal is expected to close later this month and immediately add to its earnings per share and free cash flow per share.

Second-quarter net income was C$4.5 million, or 24 Canadian cents a share, compared with C$5.3 million, or 30 Canadian cents a share, a year ago.

Despite high commodity input costs and unusually poor weather, its quarterly revenue rose 46 percent to C$183.8 million. (Reporting by Amruta Sabnis in Bangalore; Editing by Savio D’Souza)

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