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Gardenburger Up for Sale

Irvine-based Gardenburger Inc., a maker of meat-substitute patties and other products, has hired Piper Jaffray & Co. to find a buyer for the struggling company.

Gardenburger could sell for around $40 million, according to TheDeal.com, an investment banking Web site.

The company went public in the early 1990s and now trades on the low-profile over-the-counter exchange after being delisted from Nasdaq in 2001.

Shareholders include Gruber & McBaine Capital Management LLC and Rosewood Capital LLC, both of San Francisco, and other private equity firms. Annex Capital Management LLC of New York holds Gardenburger’s convertible debt.

Gardenburger was an early player in meatless products but has been overtaken by big rivals,Kellogg Co.’s Morningstar Farms and H.J. Heinz Co.’s Yves Veggie Cuisine.

The company counts about $40 million a year in sales, though they are falling. For the six months through March, Gardenburger’s sales fell 10% to $21.2 million from a year earlier.

Gardenburger had an operating loss of $1.2 million on sales of $12 million for the March quarter.

The company has about $30 million in debt, most of which is convertible to stock.

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