OAK BROOK, ILL. — TreeHouse Foods on Feb. 1 said it has completed the acquisition of the private brands business of Omaha-based ConAgra Foods. TreeHouse paid $2.7 billion in cash plus transaction expenses for the business, and financed the deal through the closing of its previously announced offerings of $775 million in aggregate principal senior notes due 2024 with a 6% annual interest rate and common stock issuance of 13.3 million shares at a price of $65 per share, aggregating $862.5 million in gross proceeds. The remainder of the purchase price was financed under TreeHouse’s revolving credit facility.
The transaction first was announced in early November 2015.
|Sam K. Reed, chairman, president and c.e.o. of TreeHouse Foods
“We are pleased to have closed the acquisition and will continue to focus on driving shareholder value and offering our customers value without compromise through economies of scale, quality products and superior customer service,” said Sam K. Reed, chairman, president and chief executive officer of TreeHouse Foods. “The Private Brands acquisition broadens our portfolio of offerings for our customers. We remain unwaveringly committed to supporting our customers’ efforts to build their corporate brands and offer consumers the best combination of choice and value. We are looking forward to working as one go-to-market team to achieve success and will work tirelessly to develop the systems and infrastructure to deliver a seamless integration.”
TreeHouse said the acquisition of ConAgra’s private brands operations “meaningfully expands” its presence in private label dry and refrigerated grocery, and will be called TreeHouse Private Brands. Bay Valley Foods (with Flagstone Foods) and TreeHouse Private Brands will be the operating platforms of TreeHouse Foods, Inc.
Following the Private Brands acquisition, TreeHouse Foods, Inc. has pro forma sales of approximately $7 billion for the 12 months ended Dec. 31, 2015, more than 50 manufacturing facilities and more than 16,000 employees.
Sean Connolly, president and c.e.o. of ConAgra Foods, said the sale of the private label business to TreeHouse Foods marks another important step for ConAgra Foods as its transforms the company to drive sustainable growth, more consistent performance and deliver enhanced shareholder value.
|Sean Connolly, president and c.e.o. of ConAgra Foods
“We are confident the private label business will be well-positioned as part of TreeHouse Foods, and our companies are working closely together to ensure a smooth transition for all stakeholders,” Mr. Connolly said.Under the terms of the agreement, ConAgra Foods sold the vast majority of its private label operations, which are classified as discontinued operations. Among other assets, this includes a network of 32 manufacturing facilities in the United States, Canada and Italy. Certain private label operations were not part of the sale, including canned pasta, cooking spray, peanut butter, pudding/gels, Gelit frozen pasta product offerings, as well as the HK Anderson and Kangaroo brand equities, trademarks and business portfolios. Results for these operations, which were not material, were moved to ConAgra’s Consumer Foods reporting segment in the first quarter of fiscal 2016.