Minneapolis-based Bellisio Foods to buy Overhill Farms for $81 million

Bellisio Foods is buying a Los Angeles-based frozen food peer for about $81 million, a deal that should greatly expand its reach in the frozen entree business, particularly under the Boston Market brand.

Privately held Bellisio, which is based in Minneapolis and best known for its Michelina's brand frozen entrees, will pay $5 a share for publicly owned Overhill Farms. For the past two years, both companies have produced and distributed frozen meals under the Boston Market brand through a licensing agreement.

The deal "is a major part of our growth strategy," said Jeff Tuttle, Bellisio's senior vice president of new business ventures. "It brings a nice brand to us under the Boston Market license."

The acquisition is expected to close this summer.

Now, the entire Boston Market business will be under Bellisio's wing. Plus, Overhill makes frozen meals under the Jenny Craig brand for Nestlé, as well as frozen products for Panda Express, a restaurant chain, and Safeway, one of the nation's largest supermarket operators. Minneapolis-based Target is also a customer.

Bellisio was founded by packaged food entrepreneur and Iron Range native Jeno Paulucci, who created the Michelina's brand about 20 years ago. A day before he died at age 93 in 2011, Paulucci agreed to sell Bellisio to Centre Partners, a New York private equity group.

Bellisio has a large plant in Ohio and a smaller one in Lakeville, and makes frozen foods for private label and food service customers — just like Overhill. Bellisio has around 1,300 employees, including about 200 in Minnesota. It doesn't disclose sales. But Overhill had nearly $200 million in revenue in its last fiscal year, with around 700 employees.

Overhill inked an exclusive license agreement in 2010 with Colorado-based Boston Market, a restaurant chain which has three outlets in the Twin Cities. H.J. Heinz Co. had dropped the Boston Market license after 10 years of making its frozen products.

In a conference call with stock analysts in August, Overhill CEO Jim Rudis said that by the end of 2012, the number of stores carrying the Boston Market brand was expected to hit 13,500 — an increase of about 4,000 since the firm won the license.

Overhill announced a "review of strategic alternatives" in August. The $5.00 per-share price paid by Bellisio represents a 26 percent premium over Overhill's closing stock price just before that announcement. Overhill closed Wednesday at $4.96, up almost 14 percent or 60 cents.