TreeHouse Foods announced that it has signed a definitive agreement to acquire ConAgra Foods' private brands operations. Annual sales of the combined entity will be nearly $7 billion. The transaction is valued at $2.7 billion, and closing is anticipated in the first quarter of 2016.
The acquisition of ConAgra's private brands operations will meaningfully expand TreeHouse's presence in private label dry and refrigerated grocery. The private brands operations had sales of approximately $3.6 billion for the twelve months ended May 31, 2015. Following the acquisition, TreeHouse will have pro forma sales of nearly $7 billion and adjusted EBITDA of approximately $690 million. Upon closing, TreeHouse will have more than 50 manufacturing facilities and over 16,000 employees.
"Since our founding ten years ago, our strategy has been to drive shareholder value by consolidating supply of private label brands. We offer our customers value without compromise through economies of scale, quality products and superior customer service," said Sam K. Reed, Chairman and Chief Executive Officer of TreeHouse Foods.
"The union of TreeHouse and ConAgra's private brands business establishes an industry leader in customer brands and custom products with significant scale, scope and skill and enables us to extend our reach in the grocery store by over 10 shelf stable and refrigerated food categories. Importantly, the combination will also strengthen our ability to support our customers' efforts to build their corporate brands and offer consumers the best combination of choice and value," Mr. Reed continued.
The Boards of Directors of both companies have approved the transaction, which is subject to the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the Competition Act (Canada) and other customary closing conditions.
TreeHouse Foods is a consumer packaged food and beverage manufacturer with 24 manufacturing facilities across the United States and Canada that focuses primarily on private label products for both retail grocery and food away from home customers. The company manufactures a variety of shelf stable, refrigerated and fresh products, including pickles, soups, snacks, salad dressings, sauces, dry dinners, hot cereals, single serve hot beverages and beverage enhancers. They have a comprehensive offering of packaging formats and flavor profiles, and natural, organic and preservative free ingredients in many categories.
ConAgra Foods, Inc. is one of North America's largest packaged food companies with branded and private label food found in 99 percent of America's households, as well as a strong commercial foods business serving restaurants and foodservice operations globally. Consumers can find recognized brands such as Marie Callender's, Healthy Choice, Slim Jim, Hebrew National, Orville Redenbacher's, Peter Pan, Reddi-wip, PAM, Snack Pack, Banquet, Chef Boyardee, Egg Beaters, Hunt's and many other ConAgra Foods brands, along with food sold by ConAgra Foods under private labels, in grocery, convenience, mass merchandise, club and drug stores. Additionally, ConAgra Foods supplies frozen potato and sweet potato products as well as other vegetable, spice, and bakery products to commercial and foodservice customers. ConAgra Foods operates ReadySetEat.com, an interactive recipe website that provides consumers with easy dinner recipes and more. For more information, please visit us at www.conagrafoods.com.