Conyers Park Acquisition Corp. (NASDAQ: CPAA) a publicly traded special purpose acquisition company, and an affiliate of Atkins Nutritionals, Inc., a leading developer, marketer and seller of branded nutritional food and snacking products currently owned by affiliates of Roark Capital Group, announced that they have entered into a definitive agreement. Under the terms of the agreement, Conyers Park and Atkins will combine under a new holding company, The Simply Good Foods Company, which will list on the NASDAQ stock exchange under the symbol SMPL upon closing of the proposed transaction. The new company will have an anticipated initial enterprise value of approximately $856 million, or 11.6x Atkins' estimated Calendar Year 2017 Pro Forma EBITDA of $74 million.
Jim Kilts and Dave West, executive founders of Conyers Park and longtime business leaders in the consumer food sector, 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.
Mr. Kilts commented: "I am excited to help build the Atkins® brand and its promise of simply good and nutritious food. Throughout my career, I have worked on numerous brands that both delight and satisfy consumers. We plan to add to our Simply Good Foods portfolio over time with brands that bring simple goodness, happiness and positive experiences to consumers and their families."
"Atkins is an iconic American brand that has pioneered innovative food and snacking products for consumers who are focused on overall health and wellness," said Mr. Scalzo. "Atkins is the original innovator of the low-carb, low-sugar, protein-rich approach to nutrition and healthier weight that has been very compelling to our consumers who want to make smarter and healthier choices. As a result, Atkins has become a destination brand in its aisle, and the company has achieved eight consecutive years of retail sales growth.
"Roark has been a uniquely valuable and supportive partner to the entire Atkins management team. Their insights and support have helped us thoughtfully grow the brand and business. Looking forward, access to public capital markets, combined with the operating experience and wisdom of Jim and Dave, will allow us to build on Atkins' brand heritage and consumer loyalty as we focus on growing our brand and introducing it to new consumers," continued Mr. Scalzo.
Mr. West said: "Atkins has many of the attributes that we find compelling: ownership of a unique consumer idea, a solid business model, relevance with key retailers, and a very exciting growth opportunity. With Atkins as the first part of the platform, Simply Good Foods is poised to become a dynamic vehicle for future long-term growth and M&A within both the snacking space and broader food category."
Additional Transaction Terms and Conditions
This transaction will be funded through a combination of cash, stock, and debt financing. The selling equity owners of Atkins will receive $730,125,000 in total consideration, inclusive of 10,250,000 shares of common stock of Simply Good Foods valued at $10.00 per share, subject to adjustment in accordance with the terms of the definitive agreement. The selling equity owners will also be entitled to cash payments pursuant to a Tax Receivable Agreement relating to certain Atkins' income tax attributes.
Along with the $402.5 million of cash held in Conyers Park's trust account, Conyers Park has secured commitments for a $100 million common stock private placement at $10.00 per share from large institutional investors including certain funds managed by Fidelity Management and Research Company or its affiliates, one or more funds managed by Capital Research and Management Company, and funds and accounts advised by T. Rowe Price Associates, Inc.
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%).
Goldman Sachs & Co. acted as placement agent on the common stock private placement in connection with the transaction. The proposed transaction includes committed debt financing from Barclays and Goldman Sachs & Co. Deutsche Bank Securities Inc. is acting as financial and capital markets advisor to Atkins. Kirkland & Ellis LLP is acting as legal advisor to Conyers Park. King & Spalding LLP is acting as legal advisor to Atkins.
The board of directors of Conyers Park has unanimously approved the proposed transaction. Completion of the proposed transaction, which is expected in June 2017, is subject to customary and other closing conditions, including regulatory approvals, receipt of approvals from Conyers Park's stockholders, and completion of the offer for Conyers Park's stockholders to redeem their shares.
About Atkins Nutritionals, Inc.
Atkins Nutritionals, Inc. is a growing developer, marketer and seller of branded nutritional food and snacking products. Its highly-focused product portfolio consists primarily of nutrition bars, ready-to-drink shakes, snacks and confectionery products marketed under the Atkins®, SimplyProtein®, Atkins Endulge®, Atkins Harvest Trail, and Atkins Lift brand names. Over the past 45 years, Atkins has become an iconic American brand rooted in the nutritional principles of reduced sugar and carbohydrates, with optimal protein and good fats. Atkins products are available online at Atkins.com and in more than 43,000 locations throughout the U.S. and internationally. To learn more about Atkins, visit www.atkins.com.
About Conyers Park Acquisition Corp.
Conyers Park is a special purpose acquisition company that completed its initial public offering in July 2016. Conyers Park was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or business combination with one or more businesses. Conyers Park is sponsored by Conyers Park LLC, which was formed for the express purpose of acting as the sponsor for Conyers Park. Conyers Park LLC is an affiliate of Centerview Capital, an investment company founded in 2006 by Mr. Jim Kilts, former Chairman of the Board, Chief Executive Officer, and President of Gillette, former Vice Chairman of the Board of The Procter & Gamble Company, former President and Chief Executive Officer of Nabisco, former Executive Vice President of The Philip Morris Companies, former President of Kraft USA and Oscar Mayer, and former Chairman of the Board of Nielsen Holdings N.V. For more information, please visit www.centerviewcapital.com/conyers-park. Conyers Park common stock, units and warrants are listed on the NASDAQ Stock Exchange under the symbols "CPAA", "CPAA.U" and "CPAA.W", respectively.
About Roark Capital
Roark focuses on franchised and multi-unit business models in the retail, restaurant, consumer and business services sectors. Since inception, affiliates of Roark have invested in 59 franchise/multi-unit brands, which have generated $24 billion in annual system revenues from 27,000 locations in 50 states and 75 countries. Roark's current brands include Anytime Fitness, Arby's, Atkins Nutritionals, Batteries Plus Bulbs, CKE Restaurants (the owner of Carl Jr.'s and Hardee's), Corner Bakery, Driven Brands (the owner of Maaco, Meineke, CARSTAR, 1-800 Radiator and Take 5 Oil Change), Drybar, FOCUS Brands (the owner of Auntie Anne's Pretzels, Carvel Ice Cream, Cinnabon, McAlister's Deli, Moe's Southwest Grill, and Schlotzsky's), Great Expressions Dental Centers, Il Fornaio, Jimmy John's, Massage Envy, Miller's Ale House, Naf Naf Grill, Orangetheory Fitness, Pet Retail Brands (the owner of Pet Supermarket and Pet Valu), Primrose Schools, and Waxing the City. For more information, please visit www.roarkcapital.com.
About The Simply Good Foods Company
The Simply Good Foods Company, or "Simply Good Foods", is the company created by the business combination of Conyers Park Acquisition Corp. and Atkins Nutritionals. Simply Good Foods will look to expand its platform through investment opportunities in the snacking space and broader food category. Over time, Simply Good Foods will look to become a portfolio of brands that bring simple goodness, happiness and positive experiences to consumers and their families. Simply Good Foods will list its common stock and warrants on the NASDAQ stock exchange under the symbols "SMPL" and "SMPL.W", respectively.
