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Simply Good Foods to buy Quest Nutrition for $1B

The Simply Good Foods Co. on Aug. 21 said the company will acquire protein bar maker Quest Nutrition LLC for $1 billion in cash, or approximately $870 million net of tax benefits.

A subsidiary of Simply Good Foods will buy 100% of the equity of Voyage Holdings LLC and VMG Quest Blocker Inc. from the founders of Quest and other shareholders of Voyage and VMG, according to the release.

The Colorado-based food and snack maker will use about $225 million of cash on its balance sheet, along with committed financing from Barclays, Credit Suisse and Goldman Sachs, to fund the deal. The company also expects to issue shares and anticipates a net debt to EBITDA multiple of 4.0x or less by the fiscal year ending August 2020.

Simply Good Foods said the acquisition is in line with its strategy to become a broader nutritional snacking company.

"We also believe that our collective brands will benefit from increased cross-selling and marketing opportunities, as well as enhanced go-to-market strategies that will drive meaningful net sales and earnings growth," Simply Good Foods CEO Joseph Scalzo said in a statement.

Simply Good Foods expects to close the transaction by the end of 2019, subject to customary closing conditions. Quest President and CEO Dave Ritterbush will join Simply Good Foods' board upon closing of the deal.

Centerview Partners LLC and Goldman Sachs are advisers to Simply Good Foods Co., while Kirkland & Ellis LLP is the legal adviser in this transaction. J.P. Morgan Securities LLC is providing financial advice to the Quest, while Winston & Strawn LLP is the legal adviser.