PARSIPPANY, NJ — B&G Foods, Inc. has reached an agreement to sell its Portland, ME manufacturing facility and 13.5-acre waterfront property to the Institute for Digital Engineering and Life Sciences. B&G Foods plans to move manufacturing operations of B&M, Underwood and some other brands to third-party co-manufacturing facilities and the company’s own manufacturing facilities. The decision to close the century-old manufacturing site aligns with ongoing efforts to improve productivity and reduce overall costs.
The property will become the future home of The Roux Institute at Northeastern University, on a campus that will include partner companies, housing and other amenities. The manufacturing building will become the anchor of The Roux Campus, providing an incubator lab and office space for startup companies. The campus will be built in phases over approximately 10 years and will include coastal restoration to open waterfront areas to the public.
“The Portland community has been the home to B&M for more than a century, and while this was a very difficult decision, we believe it is in the best interest for the future of Portland,” said Casey Keller, president and CEO of B&G Foods. “We are confident The Roux Institute will build a new longstanding legacy on the property, one that will enrich Portland residents in new and exciting ways, and will endure as a force for good in the community for generations to come. We are grateful for the dedication of each of our employees and we are committed to supporting their transition with financial support and assistance finding new employment.”
The facility employed approximately 86 employees, and B&G Foods has a plan to offer all eligible employees severance and career transition support. In addition, The Roux Institute plans to support them through its portfolio of capabilities, including career connections with Maine employers, educational opportunities with academic partners, and possible student pathways into Northeastern University and The Roux Institute, itself.
B&G Foods does not anticipate any disruption in production or the delivery of customer orders relating to the transition of manufacturing operations, which is expected to be completed during the fourth quarter of 2021 or the first quarter of 2022. The sale, which is subject to customary closing conditions, is expected to close by the year’s end.
In connection with the closing of the facility, B&G Foods expects to trigger a multi-employer pension plan withdrawal liability with an estimated present value of $14.1 million, payable over 20 years in installments of approximately $0.9 million per year. During the third and fourth quarters of fiscal 2021, B&G Foods expects to record cash and non-cash charges relating to the multi-employer pension plan withdrawal liability, employee severance and other employee costs, the write off of equipment and other assets, and other fees, costs and expenses relating to the plant closing. The annual cash payments for the multi-employer pension plan withdrawal liability are expected to be more than offset by cost savings resulting from the transition of the manufacturing operations, and the remainder of the cash portion of the one-time charges are expected to be largely offset by the proceeds of the sale of the Portland property.
