WESTCHESTER, Ill., March 2 /PRNewswire-FirstCall/ -- TreeHouse Foods, Inc.
(NYSE: THS) today announced it has entered into a definitive agreement to
acquire the private label soup and infant feeding businesses of Del Monte
Foods Company (NYSE: DLM). The soup business is the market leader in the
private label wet soup category. The Nature's Goodness(R) infant feeding
business is the #3 brand in the U.S. infant feeding category.
TreeHouse has agreed to pay $268 million in cash for the businesses, plus
an adjustment for working capital. The transaction is expected to close in
the first quarter 2006, subject to satisfaction of customary closing
conditions. The transaction will be financed primarily through borrowings
under the Company's existing $400 million credit facility. "This is a
significant transaction for TreeHouse," commented Sam K. Reed, Chairman and
Chief Executive. "Canned soup is a very large and growing category for food
retailers and this acquisition establishes TreeHouse as the leading supplier
of private label soup. These businesses fit well with our Bay Valley Foods
platform as the leading supplier of private label pickles and non-dairy coffee
creamer. Our revenue base will grow from approximately $700 million to
$1 billion on an ongoing basis."
For the 12 months ending April 30, 2006 the private label soup and infant
feeding businesses together are expected to generate approximately
$295 million of net sales. Based upon forecast results for calendar 2006,
preliminary purchase accounting allocations and the costs of integrating
operations, TreeHouse anticipates the transaction will be modestly accretive
to 2006 earnings.
The soup business manufactures and distributes condensed soup, ready-to-
serve soup, broth and gravy, primarily to supermarkets and mass merchandisers
for sale under the retailer's own label. The business has an estimated 70%
volume share of private label soup, which in turn has about a 10% penetration
of the wet soup category.
The Nature's Goodness(R) offerings include a complete product line focused
on the four steps of a baby's development. Products include a wide variety of
baby cereals, fruits, vegetables, juices, meats, dinners and desserts, as well
as a Toddler Cuisine(R) line of products intended to resemble adult-style
meals. Products are sold to customers in the grocery, mass and foodservice
channels. The Nature's Goodness(R) infant feeding business is the #3 brand in
the U.S. infant feeding category with an approximately 5% dollar share in the
U.S. retail market.
Soup and infant feeding products are manufactured at facilities in
Pittsburgh, PA and Mendota, IL. TreeHouse will acquire the Pittsburgh, PA
manufacturing facility and distribution center and enter into a long-term
lease agreement at Del Monte's Mendota, IL manufacturing facility. The
businesses' headquarters will remain in Pittsburgh, PA. TreeHouse does not
anticipate any significant changes to the existing operations.
"Both Pittsburgh and Mendota are excellent facilities that have been well
run by Del Monte. We look forward to working with employees there to build
the businesses," commented Reed.
Wachovia Securities is acting as financial advisor to TreeHouse in
connection with the transaction.
A webcast to discuss the agreement to acquire the businesses will begin at
10:00 a.m. EST today. It may be accessed by visiting the "Webcast" section of
the company website at http://www.treehousefoods.com .
About TreeHouse Foods
TreeHouse is a food manufacturer servicing primarily the retail grocery
and foodservice channels. Its products include pickles and related products;
non-dairy powdered coffee creamer; and other food products including aseptic
sauces, refrigerated salad dressings, and liquid non-dairy creamer. TreeHouse
believes it is the largest manufacturer of pickles and non-dairy powdered
creamer in the United States based on sales volume.
About Del Monte Foods
Del Monte Foods is one of the country's largest and most well known
producers, distributors and marketers of premium quality, branded and private
label food and pet products for the U.S. retail market, generating over
$3 billion in net sales in fiscal 2005. With a powerful portfolio of brands
including Del Monte(R), Contadina(R), StarKist(R), S&W(R), Nature's
Goodness(R), College Inn(R), 9Lives(R), Kibbles 'n Bits(R), Pup-Peroni(R),
Snausages(R), Pounce(R) and Meaty Bone(R), Del Monte products are found in
nine out of ten American households. For more information on Del Monte Foods
Company (NYSE: DLM), visit the Company's website at http://www.delmonte.com .
This press release contains "forward-looking statements." Forward-looking
statements include all statements that do not relate solely to historical or
current facts, and can generally be identified by the use of words such as
"may," "should," "could," "expect," "seek to," "anticipates," "plans,"
"believes," "estimates," "intends," "predicts," "projects," "potential" or
"continue" or the negative of such terms and other comparable terminology.
These statements are only predictions. The outcome of the events described in
these forward-looking statements is subject to known and unknown risks,
uncertainties and other factors that may cause the company or its industry's
actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance
or achievement expressed or implied by these forward-looking statements.
TreeHouse's Registration Statement on Form 10 discusses some of the factors
that could contribute to these differences. You are cautioned not to unduly
rely on such forward-looking statements, which speak only as of the date made,
when evaluating the information presented in this presentation. The company
expressly disclaims any obligation or undertaking to disseminate any updates
or revisions to any forward-looking statement contained herein, to reflect any
change in its expectations with regard thereto, or any other change in events,
conditions or circumstances on which any statement is based.
SOURCE TreeHouse Foods, Inc.
CONTACT: Investor Relations of TreeHouse Foods, Inc.,
+1-708-483-1300 Ext. 1344
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Web site: http://www.treehousefoods.com