Sunset Brands is seeking to become a player in the nutritional foods sector by rapidly buying up natural and functional food brands. In June of last year it acquired a low-carb foods maker Low Carb Creations.
US Mills, which markets brands such as Uncle Sam Cereal, Erewhon, New Morning and Skinner's Raisin Bran, gives it its first organic and natural cereal products.
The business, which generated revenues of around $15.8 million last year and more than $2 million in operating cash flow, sells it products through a range of sales channels throughout the US, Canada and Puerto Rico as well as Asia and the Middle East.
"The acquisition of US Mills creates significant operational cost savings and provides sales and marketing synergies towards the distribution of Sunset Brands' existing brand portfolio," said Todd Sanders, president and chief executive officer of Sunset Brands.
The natural and organic foods category is estimated to be growing at more than 20 per cent annually.
"From this acquisition, Sunset Brands expects further expansion through a combination of organic growth and the pursuit of additional strategic acquisitions," added Sanders.
Terms of the transaction will be revealed in the company's Form 8-K to be filed with the Securities and Exchange Commission on or before February 25, 2005.
The transaction is scheduled to close on or before April 15. It is subject to regulatory approvals and other customary closing conditions.