OAK BROOK, ILL. — TreeHouse Foods, Inc. has agreed to sell its private label Snacks business unit to Atlas Holdings L.L.C., Greenwich, Conn., for $90 million. Atlas Holdings is an investor that has 19 companies in a diverse range of industries, including aluminum processing, automotive, building material and others. The company’s current portfolio does not include any other food manufacturers.
TreeHouse Foods’ Snacks unit employs 800 and has three manufacturing plants in Robersonville, N.C.; El Paso, Texas; and Dothan, Ala. TreeHouse Foods projects the Snacks business will generate $670 million in sales in 2019.
“This Snacks business will be a welcome addition to the Atlas family of manufacturing and distribution companies,” said Michael Sher, a partner with Atlas Holdings. “Customers are consistently choosing private label brands, and this business is a premier manufacturer with unique growth potential. We’re excited to partner with this team to deliver the finest healthy, private label snacks in the industry.”
The sale is subject to customary closing conditions and is expected to close during the third quarter of this year.
“The sale of the Snacks division is a key step in optimizing TreeHouse’s overall product portfolio,” said Steven T. Oakland, president and chief executive officer of TreeHouse Foods. “It is the culmination of TreeHouse’s strategic review of its Snacks business. This transaction allows the Snacks division to unlock its potential and serve its customers even better under Atlas’ ownership.”
TreeHouse Foods announced this past December that its Snacks business was under strategic review. As recently as this past May, management said the company had a “snacks issue.”
“Snacks has lost meaningful volume beyond simply the large customer that we called out last year,” said Matthew J. Foulston, executive vice-president and chief financial officer, during a May 2 conference call with securities analysts to discuss first-quarter results. “Clearly, profitability of the business is deteriorating.”
TreeHouse Foods acquired the Snacks business in 2014 from Flagstone Foods, St. Paul, Minn., for $860 million. Flagstone reported sales of $697 million during 2013.