03/27/2013 08:05 EDT | Updated 05/27/2013 05:12 EDT

Premium Brands ups dividend 6.3%; closes $55M purchase of Freybe Gourmet Foods

VANCOUVER - Premium Brands Holdings Corp. (TSX:PBH) is increasing its quarterly dividend 6.3 per cent.

The Richmond, B.C.,-based specialty food company said Wednesday that the dividend will rise to 31 cents per share from 29 cents, payable July 15 to shareholders of record on June 28.

Premium Brands says it is making the move in conjunction with the closing of its friendly, $55-million purchase of Vancouver-area deli foods producer Freybe Gourmet Foods Ltd.

Based on Tuesday's closing price of $17.67 per share, it would raise the annual yield on the issue to seven per cent.

"Over the last seven years we have made significant progress towards achieving our goal of a 50 per cent dividend payout ratio," said Premium Brands president and CEO George Paleologou said.

"We expect the Freybe transaction to reduce our payout ratio to below our 50 per cent target and, accordingly, we are pleased to be able to reward our shareholders with a dividend rate increase," he said.

Premium Brands owns a broad range of specialty food manufacturing and differentiated food distribution businesses with operations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nevada and Washington state.