OAK BROOK, ILL. – The board of directors of private label manufacturer TreeHouse Foods, Inc. has initiated a strategic review that may involve the sale of all or part of the company. Breaking up the company would entail divesting a portion of TreeHouse’s Meal Preparation business unit to allow management to focus on the Snacking and Beverage unit, according to the company.
“The board’s decision to explore strategic alternatives follows careful consideration as well as engagement with many of our shareholders over the past year,” said Ann M. Sardini, chair of the board. “The TreeHouse team has executed a major transformation since 2018, improving the ability to support its private label customers and navigate a challenging operating environment. This progress and the strong long-term consumer demand trends for private label provide a favorable backdrop as the board thoroughly reviews and considers strategic options with a commitment to maximizing value for all shareholders.”
The announcement followed release of the company’s third-quarter results, ended Sept. 30. For the first nine months of fiscal 2021, TreeHouse Foods earned $16.6 million, equal to 3¢ per share on the common stock, and an improvement over the same period of the previous year when the company recorded a loss of $20.6 million.
Sales for the nine-month period were $3.16 billion, down slightly from $3.17 billion in fiscal 2020.
“We continue to be confident in our ability to capitalize on the strong long-term fundamentals of our business,” said Steve Oakland, president and chief executive officer. “We remain committed to serving our customers and supporting our employees as the board conducts this review. We are proud of the progress we have made to improve our efficiency and the actions we are taking to drive growth, optimize our portfolio and support our customers.”
Earlier this year investment company Jana Partners, which at the time owned a 7.5% stake in TreeHouse Foods, urged the board of directors to explore a strategic review and possible sale. The two sides reached a “cooperation agreement” in March that included the addition of two Jana-supported independent directors to the board.